Principles of Macroeconomics / Unit 2 MAC 0127 short lesson, about 20 seconds
Consumer and Producer Surplus
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The idea
Consumer surplus is what a buyer would have paid minus what they did pay. Producer surplus is the price received minus the least the seller would accept.
In practice
Someone willing to pay thirty dollars who pays twenty gains ten.
Where people slip
Their sum is social surplus, and it is largest at the equilibrium quantity.
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