Questions Answers What is consumer surplus? How do we determine consumer surplus
ID: 1151919 • Letter: Q
Question
Questions
Answers
What is consumer surplus? How do we determine consumer surplus on a demand diagram?
What is producer surplus? How do we determine producer surplus on a supply diagram?
What is price ceiling? How do you determine if a price ceiling is binding?
What is excess demand? How does excess demand occur?
What is price floor? How do you determine if a price floor is binding?
What is deadweight loss (DWL)?
How does deadweight loss depend on elasticity of demand and supply?
What is quota?
Why taxes create a deadweight loss?
What is tax incidence?
What is a subsidy?
Why subsidies create a deadweight loss?
Questions
Answers
What is consumer surplus? How do we determine consumer surplus on a demand diagram?
What is producer surplus? How do we determine producer surplus on a supply diagram?
What is price ceiling? How do you determine if a price ceiling is binding?
What is excess demand? How does excess demand occur?
What is price floor? How do you determine if a price floor is binding?
What is deadweight loss (DWL)?
How does deadweight loss depend on elasticity of demand and supply?
What is quota?
Why taxes create a deadweight loss?
What is tax incidence?
What is a subsidy?
Why subsidies create a deadweight loss?
Explanation / Answer
Ans) Consumer surplus is the consumer benefit which is calculated as the difference between what consumers are willing to pay and what they actually pay for a good service. On the demand graph, the consumer surplus is the area above the price and below the demand curve.
Ans) producer surplus is the producer benefit which is calculated as the difference between the amount which sellers are willing to supply and the amount what they actually recieve for a good. On the supply graph producer surplus is the area below the price and above the supply curve.
Ans) price ceiling is a price control or the maximum price that can be charged for a good imposed by the government to protect consumers from getting exploited. Price ceiling is binding when it is set below the market price, that price binds the market for that good.
Ans) excess demand is a situation where the demand exceeds the supply. It can be occured the price is set below the market price when the quantity demanded is greater than quantity supplied and it leads to shortage
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.