1.2.8 Producer And Consumer Surplus Flashcards
1
Q
What is producer surplus?
A
The difference between the amount that the producer is willing to sell a product for and what they sell it for.
2
Q
What is consumer surplus?
A
The difference between the amount the consumer is willing to pay and the price they pay.
3
Q
What is the formula for social surplus?
A
Social surplus = Producer surplus + Consumer surplus
