If there is a price ceiling of $5, there is a direct transfer of surplus from producers to consumers. The producer surplus transferred to those students who are able to continue to get tutoring is, in numerals, $_____.

If there is a price ceiling of $5, there is a direct transfer of surplus from producers to consumers. The producer surplus transferred to those students who are able to continue to get tutoring is, in numerals, $_____.

Economics Today and Tomorrow, Student Edition

1st Edition

ISBN:9780078747663

Author:McGraw-Hill

Publisher:McGraw-Hill

Chapter5: Buying The Necessities

Section: Chapter Questions

Problem 19AA

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Question

Price (per hour
of tutoring)
$25
20
15
10
7.50
5
2.50
100 200
S
D
300 400 500 600 700 800 900
Quantity (hours of tutoring per week)

Definition Definition Consumer surplus is the consumers' gain from trade. The consumer surplus is the area below the demand curve but above the equilibrium price, up to the equilibrium quantity. Producer surplus is the producer's gain from trade. The producer surplus is the area above the supply curve but below the equilibrium price, up to the equilibrium quantity. Consumer surplus is represented by Area A and producer surplus is represented by Area B.

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