Theme 1.2 - Producer + Consumer Surplus Flashcards
1
Q
What is consumer surplus?
A
Difference between what consumer would pay and what they actually pay
2
Q
What is producer surplus?
A
Difference between what producers are willing/able to supply a good for + the price they actually receive
3
Q
Why is large consumer surplus sought after by producers?
A
Consumers willing/able to provide higher prices than market value
