Class Notes (1,100,000)
CA (620,000)
WLU (20,000)
EC (1,000)
EC120 (600)
All (40)
Lecture 8

EC120 Lecture Notes - Lecture 8: Market Power, Invisible Hand, Market Failure


Department
Economics
Course Code
EC120
Professor
All
Lecture
8

This preview shows half of the first page. to view the full 2 pages of the document.

Chapter 7: Consumers, Producers, and the eciency of markets
Welfare economics:  !"#!$
Allocaon of resources 
" % $!&
" '!&&!
" '!  !
Consumer Surplus
(#)willingness to pay$! *!   #!&$
 #+$
(,!$ +!!!$&marginal buyer-#
+ !!$
.!$& #/0& 0#12# +
+#!+# !
Consumer surplus: #!!!$& !#&#3
45/+#16/ &!##1'.6#3#!+
 &!&$! 
.45 +#+&! ,
.$!4
7 8!4 !!$#&!$!$4
(9:;(/4!4 ((9:1
7 8!4#+!$ !(9:9
;(/4!#((9:91
  4< !"#!$&
&! &&!+#
#+!7/*-$"!2)#3=$1
'&!!!$!#4 !
,!&&!$
Cost and the Supply Curve – Producer surplus
Cost !++!$ $!+&/&$9+
 1&$/&&!1 !!$
(!&$!&!*!
45/ !+#16/16 #3!+
 &!&$! 
(,!$&&+!marginal seller, 
+ !&!
Producer surplus: !&!$ !)#3
.45#+&&+&! ,
.$!4
7 8!4+!$ (9:9;(
/!!4! !((9:91
7 8!4!$(9:;(/!!4!
!+!$((9:1
Total Surplus
You're Reading a Preview

Unlock to view full version