ECON 010 Chapter Notes - Chapter 3: Economic Surplus, Marginal Utility, Demand Curve
Document Summary
Occasionally, however, consumers succeed in having the government impose a price ceiling, which is a legally determined maximum price that sellers may charge. Ie rent control firms also sometimes succeed in having the government impose a price floor, which is a legally determined minimum price that sellers may receive. Producer surplus measures the dollar benefit firms receive from selling goods or services in a particular market. Economic surplus in a market is the sum of consumer surplus and producer surplus. Consumer surplus is the difference between the highest price a consumer is willing to pay for a good or service and the actual price the consumer pays. Demand curves show the willingness of consumers to purchase a product at different prices. Marginal cost is the additional cost to a firm of producing one more unit of a good or service.
