1.2.8 Consumer and producer surplus

    Cards (4)

    • What is consumer surplus?

      Difference between the price the consumer is willing to pay and the price they actually pay
    • Where is consumer surplus on a supply and demand diagram?
      Area below the demand curve and above the equilibrium line (to triangle)
    • What is producer surplus?

      The difference between the price that the producer is wiling to supply a good at and the price that they actually receive for it
    • Where is producer surplus?

      The area above the supply curve and below the equilibrium line (bottom triangle)