Consumer Surplus: - Consumer surplus is the difference between the price a consumer pays for a good or service and the price they would be willing to pay. -...
Consumer Surplus:
Consumer surplus is the difference between the price a consumer pays for a good or service and the price they would be willing to pay.
A higher price reflects lower consumer surplus, meaning the consumer is paying more than they would be willing to pay.
Consumer surplus increases when the price increases, and it decreases when the price decreases.
Producer Surplus:
Producer surplus is the difference between the price a producer receives for a good or service and the price they would be willing to accept.
A higher price reflects lower producer surplus, meaning the producer is receiving more than they would be willing to receive.
Producer surplus increases when the price increases, and it decreases when the price decreases