Consumer and Producer Surplus Flashcards
1
Q
What is consumer surplus?
A
It is the difference between the price consumers are willing and able to pay for a good/service and the price they actually pay.
2
Q
How do you find consumer surplus?
A
Below the demand curve, above the price line.
3
Q
What is producer surplus?
A
It is the difference between the price producers are willing and able to supply a good/service for and the price they actually receive.
4
Q
How do you find producer surplus?
A
Above the supply curve, below the price line.
5
Q
How do you find society surplus?
A
Consumer surplus + producer surplus
