Explain why the combination of consumer and producer surplus not maximized if there is excess demand or supply

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 7, Problem 1QE

To determine

Explain why the combination of consumer and producer surplus not maximized if there is excess demand or supply

Expert Solution & Answer

Explanation of Solution

If there is either excess supply or excess demand, the number of traders will be lesser than if price were allowed to move to its equilibrium price. Thus, there is a loss of surplus in the market.

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

Q Search entries or author... All ↓ Sort View Split Screen Expand Threads i You must post before seeing replies. Edit history will be available to instructors. Due Dec 21 11:59pm 10 points poss 18 Replies, 18 Unread Discussion 15: Organizational Structures Select one of the questions below and write a 150 - 200 word discussion post. Respond to at least one other student in 50 - 100 words. 1. Describe the characteristics of a bureaucracy. 2. Describe a matrix organization. Q Search hp

Q Search entries or author... All i ↓ Sort View Split Screen Expand Threads You must post before seeing replies. Edit history will be available to instructors. Due Dec 21 11:59pm 10 points pos 19 Replies, 19 Unread Discussion 14: Conflict Write a 150-200 word discussion post based on the 3 prompts below. Respond to at least one other student in 50 - 100 words 1. Define conflict. 2. Contrast task, relationship, and process conflict. 3. Explain contemporary perspectives of conflict. Reply Q Search

X Topic: Discussion 12: Leadership X /courses/1548/discussion_topics/15744?module_item_id=111746 Winter > Discussions > Discussion 12: Leadership You must post before seeing replies. Edit history will be available to instructors. Due Dec 14 11:59pm 时☆ 10 points possible 18 Replies, 18 Unread Discussion 12: Leadership Select one of the questions below and write a 150 - 200 word discussion post. Respond to at least one other student in 50 - 100 words. 1. Define the characteristics of a charismatic leader. 2. Contrast transformational with transactional leaders. Reply Search X 4 b 12/

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 7, Problem 1QE

To determine

Explain why the combination of consumer and producer surplus not maximized if there is excess demand or supply

Expert Solution & Answer

Explanation of Solution

If there is either excess supply or excess demand, the number of traders will be lesser than if price were allowed to move to its equilibrium price. Thus, there is a loss of surplus in the market.

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 7, Problem 1QE

To determine

Explain why the combination of consumer and producer surplus not maximized if there is excess demand or supply

Expert Solution & Answer

Explanation of Solution

If there is either excess supply or excess demand, the number of traders will be lesser than if price were allowed to move to its equilibrium price. Thus, there is a loss of surplus in the market.

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 7, Problem 1QE

To determine

Explain why the combination of consumer and producer surplus not maximized if there is excess demand or supply

Expert Solution & Answer

Explanation of Solution

If there is either excess supply or excess demand, the number of traders will be lesser than if price were allowed to move to its equilibrium price. Thus, there is a loss of surplus in the market.

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 7, Problem 1QE

To determine

Explain why the combination of consumer and producer surplus not maximized if there is excess demand or supply

Expert Solution & Answer

Explanation of Solution

If there is either excess supply or excess demand, the number of traders will be lesser than if price were allowed to move to its equilibrium price. Thus, there is a loss of surplus in the market.

Answer 6

Chapter 7, Problem 1QE

To determine

Explain why the combination of consumer and producer surplus not maximized if there is excess demand or supply

Expert Solution & Answer

Explanation of Solution

If there is either excess supply or excess demand, the number of traders will be lesser than if price were allowed to move to its equilibrium price. Thus, there is a loss of surplus in the market.

Answer 7

Chapter 7, Problem 1QE

To determine

Explain why the combination of consumer and producer surplus not maximized if there is excess demand or supply

Answer 8

Expert Solution & Answer

Explanation of Solution

If there is either excess supply or excess demand, the number of traders will be lesser than if price were allowed to move to its equilibrium price. Thus, there is a loss of surplus in the market.