Consumer surplus and producer surplus .

Question

Want to see more full solutions like this?

Answer 1

Question

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.

Chapter 4, Problem 1QP

To determine

Consumer surplus and producer surplus.

Expert Solution & Answer

Explanation of Solution

The consumer surplus can be explained by the difference between the highest price that the consumer is willing to pay and the actual price that the consumer pays. The difference between these two prices is known as the surplus to the consumer. Thus, when the willing price is higher than the actual price, there will be consumer surplus, and there will be no consumer surplus when the willing price is lower than the actual price.

The producer surplus on the other hand is the difference between the lowest willing to accept price by the producer and the actual price that the producer receives by selling his product. Thus, when the price is higher, there will be a producer surplus, and if the price is lower than the willing to accept price, then there will no producer surplus.

Economics Concept Introduction

Consumer surplus: It is the difference between the highest willing price of the consumer and the actual price that the consumer pays.

Producer surplus: It is the difference between the lowest willing to accept price by the producer and the actual price received by the producer.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

1) Use the supply and demand schedules to graph the supply and demand functions. Find and show on the graph the equilibrium price and quantity, label it (A). P Q demanded P Q supplied 0 75 0 0 5 65 5 0 10 55 10 0 15 45 15 10 20 35 20 20 25 25 25 30 30 15 30 40 35 40 5 0 35 40 50 60 2) Find graphically and numerically the consumers and producers' surplus 3) The government introduced a tax of 10$, Label the price buyers pay and suppliers receive. Label the new equilibrium for buyers (B) and Sellers (S). How the surpluses have changed? Give the numerical answer and show on the graph. 4) Calculate using midpoint method the elasticity of demand curve from point (A) to (B) and elasticity of the supply curve from point (A) to (C).

Four heirs (A, B, C, and D) must divide fairly an estate consisting of three items — a house, a cabin and a boat — using the method of sealed bids. The players' bids (in dollars) are: In the initial allocation, player D Group of answer choices gets no items and gets $62,500 from the estate. gets the house and pays the estate $122,500. gets the cabin and gets $7,500 from the estate. gets the boat and and gets $55,500 from the estate. none of these

Jack and Jill are getting a divorce. Except for the house, they own very little of value so they agree to divide the house fairly using the method of sealed bids. Jack bids 140,000 and Jill bids 160,000. After all is said and done, the final outcome is Group of answer choices Jill gets the house and pays Jack $80,000. Jill gets the house and pays Jack $75,000. Jill gets the house and pays Jack $70,000. Jill gets the house and pays Jack $65,000. none of these

Answer 2

Question

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.

Chapter 4, Problem 1QP

To determine

Consumer surplus and producer surplus.

Expert Solution & Answer

Explanation of Solution

The consumer surplus can be explained by the difference between the highest price that the consumer is willing to pay and the actual price that the consumer pays. The difference between these two prices is known as the surplus to the consumer. Thus, when the willing price is higher than the actual price, there will be consumer surplus, and there will be no consumer surplus when the willing price is lower than the actual price.

The producer surplus on the other hand is the difference between the lowest willing to accept price by the producer and the actual price that the producer receives by selling his product. Thus, when the price is higher, there will be a producer surplus, and if the price is lower than the willing to accept price, then there will no producer surplus.

Economics Concept Introduction

Consumer surplus: It is the difference between the highest willing price of the consumer and the actual price that the consumer pays.

Producer surplus: It is the difference between the lowest willing to accept price by the producer and the actual price received by the producer.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

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.

Chapter 4, Problem 1QP

To determine

Consumer surplus and producer surplus.

Expert Solution & Answer

Explanation of Solution

The consumer surplus can be explained by the difference between the highest price that the consumer is willing to pay and the actual price that the consumer pays. The difference between these two prices is known as the surplus to the consumer. Thus, when the willing price is higher than the actual price, there will be consumer surplus, and there will be no consumer surplus when the willing price is lower than the actual price.

The producer surplus on the other hand is the difference between the lowest willing to accept price by the producer and the actual price that the producer receives by selling his product. Thus, when the price is higher, there will be a producer surplus, and if the price is lower than the willing to accept price, then there will no producer surplus.

Economics Concept Introduction

Consumer surplus: It is the difference between the highest willing price of the consumer and the actual price that the consumer pays.

Producer surplus: It is the difference between the lowest willing to accept price by the producer and the actual price received by the producer.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

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.

Chapter 4, Problem 1QP

To determine

Consumer surplus and producer surplus.

Expert Solution & Answer

Explanation of Solution

The consumer surplus can be explained by the difference between the highest price that the consumer is willing to pay and the actual price that the consumer pays. The difference between these two prices is known as the surplus to the consumer. Thus, when the willing price is higher than the actual price, there will be consumer surplus, and there will be no consumer surplus when the willing price is lower than the actual price.

The producer surplus on the other hand is the difference between the lowest willing to accept price by the producer and the actual price that the producer receives by selling his product. Thus, when the price is higher, there will be a producer surplus, and if the price is lower than the willing to accept price, then there will no producer surplus.

Economics Concept Introduction

Consumer surplus: It is the difference between the highest willing price of the consumer and the actual price that the consumer pays.

Producer surplus: It is the difference between the lowest willing to accept price by the producer and the actual price received by the producer.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 4, Problem 1QP

To determine

Consumer surplus and producer surplus.

Expert Solution & Answer

Explanation of Solution

The consumer surplus can be explained by the difference between the highest price that the consumer is willing to pay and the actual price that the consumer pays. The difference between these two prices is known as the surplus to the consumer. Thus, when the willing price is higher than the actual price, there will be consumer surplus, and there will be no consumer surplus when the willing price is lower than the actual price.

The producer surplus on the other hand is the difference between the lowest willing to accept price by the producer and the actual price that the producer receives by selling his product. Thus, when the price is higher, there will be a producer surplus, and if the price is lower than the willing to accept price, then there will no producer surplus.

Economics Concept Introduction

Consumer surplus: It is the difference between the highest willing price of the consumer and the actual price that the consumer pays.

Producer surplus: It is the difference between the lowest willing to accept price by the producer and the actual price received by the producer.

Answer 6

Chapter 4, Problem 1QP

To determine

Consumer surplus and producer surplus.

Expert Solution & Answer

Explanation of Solution

The consumer surplus can be explained by the difference between the highest price that the consumer is willing to pay and the actual price that the consumer pays. The difference between these two prices is known as the surplus to the consumer. Thus, when the willing price is higher than the actual price, there will be consumer surplus, and there will be no consumer surplus when the willing price is lower than the actual price.

The producer surplus on the other hand is the difference between the lowest willing to accept price by the producer and the actual price that the producer receives by selling his product. Thus, when the price is higher, there will be a producer surplus, and if the price is lower than the willing to accept price, then there will no producer surplus.

Economics Concept Introduction

Consumer surplus: It is the difference between the highest willing price of the consumer and the actual price that the consumer pays.

Producer surplus: It is the difference between the lowest willing to accept price by the producer and the actual price received by the producer.

Answer 7

Chapter 4, Problem 1QP

To determine

Consumer surplus and producer surplus.

Answer 8

Expert Solution & Answer

Explanation of Solution

The consumer surplus can be explained by the difference between the highest price that the consumer is willing to pay and the actual price that the consumer pays. The difference between these two prices is known as the surplus to the consumer. Thus, when the willing price is higher than the actual price, there will be consumer surplus, and there will be no consumer surplus when the willing price is lower than the actual price.

The producer surplus on the other hand is the difference between the lowest willing to accept price by the producer and the actual price that the producer receives by selling his product. Thus, when the price is higher, there will be a producer surplus, and if the price is lower than the willing to accept price, then there will no producer surplus.