Micro 1.2.8

Question 1

What is consumer surplus

Answer 1

The difference between the total amount consumers are willing and able to pay (demand curve) and amount they actually pay (equilibrium price)

(Above price, under curve)

Question 2

What is producer surplus?

Answer 2

The difference between the price producers are willing and able to supply a good for and the price they actually receive

(Under price, above curve)