Answered: f the producer surplus is $1000 and the…

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Economics

f the producer surplus is $1000 and the consumer surplus is $300, social surplus is ________. $700 -$700 $1300

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter3: Market Demand And Supply

Section3.A: Consumer Surplus, Proudcer Suplus, And Market Efficency

Problem 6SQ

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Concept explainers

Total Surplus and Deadweight Loss

Economists generally define efficiency as when it is impossible to improve the situation of one party without imposing a cost on another. Conversely, if a situation gets inefficient, a party will benefit more than the other without imposing costs on others.

Question

If the producer surplus is $1000 and the consumer surplus is $300, social surplus is ________.

$700

-$700

$1300

Consumer’s gain from trade. The consumer surplus is the area below the demand curve but above the equilibrium price and up to the equilibrium quantity. Consumer surplus is represented by area A.

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