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Consumer Surplus and Producer Surplus
Consumer Surplus and Producer Surplus
Consumer Surplus and Producer Surplus
SURPLUS
CONSUMER AND PRODUCER SURPLUS
• Both consumer surplus and producer surplus are
economic terms used to define market wellness by
studying the relationship between the consumers
and suppliers.
• They explain the opportunity cost consumers forego
to gain a marginal benefit for buying a good or
service.
• To the producer, it is the willingness and ability to
produce an extra unit of a product based on the
marginal cost of producing more goods.
CONSUMER AND PRODUCER SURPLUS
CONSUMER AND PRODUCER SURPLUS
• Understanding Consumer Surplus and Producer
Surplus
• When discussing consumer and producer surplus, it
is important to understand some base concepts
used by economists to explain the inter-
relationship.
• Both consumer and producer surplus can be
graphed to display either a demand curve or
marginal benefit curve (MB) and a supply curve or
marginal cost curve (MC).
CONSUMER AND PRODUCER SURPLUS
CONSUMER AND PRODUCER SURPLUS