consumer/producer surpluss

• consumer surplus


  the difference between how much the consumers are willing to pay and what they actually pay for the product
• producers' surplus 


  the difference between the price the producers receive and the cost of supply
• consumer surplus diagrammatically 


  it is represented by the area under the demand curve and above the market price
• producers surplus diagrammatically 


  it is represented by the area between the supply curve and the market price
• factors affecting consumers surplus


  the gradient of the demand curve, the steeper it is the greater consumer surplus

  shifts in demand increase in demand will increase amount of consumers surplus
• changes in demand

  if demand has an extension (increase in quantity demanded) the consumer surplus will increase
• factors affecting producers surplus

  gradient of supply curve, the steeper it is the greater the producers surplus will be

  shift in supply, increase in supply will increase amount of producers surplus
• households definition


  a group of people who live together who share resources or an individual that lives alone