Term
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Definition
| difference between the highest price a consumer is willing to pay for a g/s and what they actually pay |
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Term
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Definition
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Term
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Definition
| difference between the lowest price a firm would be willing to accept for a good and what it actually gets |
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Term
| how to get totals of PS/CS? |
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Definition
| add number jumps in graph |
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Term
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Definition
| below demand curve and above market price |
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Term
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Definition
| area below market price and above supply curve |
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Term
| what makes competitive markets efficient? |
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Definition
the marginal benefit from the last unit sold = marginal cost of production
(NO DWL) |
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Term
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Definition
CS +PS
shows overall betterment to society |
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Term
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Definition
what could have been produced in competitive equilibrium
reduction in economic surplus resulting from not being in competitive equilibrium |
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Term
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Definition
| the marginal benefit to consumers of last unit produced is equal to its marginal cost of production and when sum of CS+PS is at the maximum |
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Term
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Definition
| buying and selling take place at prices that violate govt regulations |
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Term
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Definition
max price
protects consumers
causes shortage |
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Term
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Definition
min price
protects producers
causes surplus |
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Term
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Definition
less are consumed
affects equilibrium in market
reduces CS & PS |
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Term
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Definition
DWL from tax
(tax is efficient when this is low) |
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Term
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Definition
| actual division of the burden of a tax between buyers and sellers |
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