onsumer surplus plus producer surplus is equal to:willingness-to-sell.marginal cost.total surplus.willingness-to-pay.
Question
Consumer surplus plus producer surplus is equal to:
- willingness-to-sell.
- marginal cost.
- total surplus.
- willingness-to-pay.
Solution
Consumer surplus plus producer surplus is equal to total surplus.
Here's a step-by-step explanation:
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Consumer Surplus: This is the difference between what consumers are willing to pay for a good or service and what they actually pay. It's a measure of the benefit consumers receive from buying a good or service.
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Producer Surplus: This is the difference between the price a producer actually receives and the minimum price they would be willing to sell their good or service. It's a measure of the benefit producers receive from selling a good or service.
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Total Surplus: This is the sum of the consumer surplus and the producer surplus. It's a measure of the total benefit to society from the production and consumption of a good or service.
So, consumer surplus plus producer surplus equals total surplus.
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