The role of markets (OCR A-Level Economics): Flashcards
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Consumer surplus definition
Consumer surplus definition
The difference between max price willing to pay & market price
Producer surplus definition
Producer surplus definition
Difference between price received & price willing to accept
Consumer surplus area on diagram
Consumer surplus area on diagram
Above market price, below demand curve
Producer surplus area on diagram
Producer surplus area on diagram
Below market price, above supply curve
Demand curve slope direction
Demand curve slope direction
Downward sloping
Supply curve slope direction
Supply curve slope direction
Upward sloping
Effect of price increase on consumer surplus
Effect of price increase on consumer surplus
Decreases
Effect of price decrease on consumer surplus
Effect of price decrease on consumer surplus
Increases
Effect of price increase on producer surplus
Effect of price increase on producer surplus
Increases
Effect of price decrease on producer surplus
Effect of price decrease on producer surplus
Decreases
Consumer surplus measures
Consumer surplus measures
Benefit when consumers pay less than willing to pay
Producer surplus measures
Producer surplus measures
Benefit when producers sell above minimum acceptable price