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ECON 1B03 (523)
Lecture

Chapter 7 Notes - Surplus.docx

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Department
Economics
Course
ECON 1B03
Professor
Hannah Holmes
Semester
Winter

Description
Consumer surplus: the buyer’s willingness to pay for a good minus the amount the buyer actually pays for it. The market demand curve depicts various quantities that buyers would be willing and able to purchase at different prices. The CS can be illustrated as the area under the demand curve above the selling price line. Producer Surplus: the amount a seller is paid for a good minus the seller’s cost. It measures the benefit to sellers participating in a market. Cost is a measure of the seller’s willingness-to-sell, which is the lowest price a supplier will take to produce Total Producer Surplus a good and offer it for sale. When a producer receives more than they are willing to take to produce a
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