Efficiency, Resource Allocation, and Consumer & Producer Surplus (AQA A-Level Economics): Flashcards

Efficiency of resource use at a specific point in time

Price equals marginal cost ($P = MC$)

Efficiency improvements over time via innovation & tech progress

Difference between max price willing to pay & actual price paid

Difference between min price willing to charge & actual price

Net loss of welfare when maximum total welfare fails to be reached

Achieves both productive & allocative efficiency in long run

Reduces consumer surplus by transferring it to producers

Charging each customer exactly their maximum willingness to pay

All consumer surplus is transferred to the producer