Total Social Surplus = Consumer Surplus + Producer Surplus Total Social Surplus = Value to Buyers – Costs of sellers = Sum to Marginal Benefits – Sum of Marginal Costs Consumer Surplus Producer Surplus

Market intervention and inefficiency 1. Deadweight loss

Market intervention and inefficiency 2. Deadweight loss

Market intervention and inefficiency 3. Deadweight loss

Market intervention and inefficiency 4. Deadweight loss

Market intervention and inefficiency 5. Deadweight loss

Summary of market intervention and deadweight loss Effect MB vs. MC at Qt Price ceiling Under-production MB > MC Price floor Quota Unit tax Unit subsidy Over-production MB < MC

Elasticity of demand and deadweight loss 1.

Elasticity of demand and deadweight loss 2.

Elasticity of demand and deadweight loss 3.

Elasticity of demand and deadweight loss 4.

Elasticity of demand and deadweight loss 5.

Elasticity of supply and deadweight loss 1.

Elasticity of supply and deadweight loss 2.

Elasticity of supply and deadweight loss 3.

Elasticity of supply and deadweight loss 4.

Elasticity of supply and deadweight loss 5.

Summary of elasticity of demand/supply and deadweight loss Price ceiling Smaller Larger Price floor Quota Unit tax Unit subsidy Supply Elasticity of supply Deadweight loss Price ceiling Larger Price floor Smaller Quota Unit tax Unit subsidy