Consumer and Producer Surplus Lesson 3.49. Consumer Surplus and the Demand Curve Willingness to Pay – The demand curve is based on the individual choices.

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Presentation transcript:

Consumer and Producer Surplus Lesson 3.49

Consumer Surplus and the Demand Curve Willingness to Pay – The demand curve is based on the individual choices of the people that make it up, and each individual is willing to pay a different price. – While Consumer A might be willing to pay $500 for a new television, Consumer B might only pay $300. – If the Television costs $250, both will buy the television, but each will have a different level of benefit, called surplus. B would have a surplus of $50, while A would have a surplus of $250.

Figure 49.1 The Demand Curve for Used Textbooks Ray and Anderson: Krugman’s Economics for AP, First Edition Copyright © 2011 by Worth Publishers

Figure 49.2 Consumer Surplus in the Used-Textbook Market Ray and Anderson: Krugman’s Economics for AP, First Edition Copyright © 2011 by Worth Publishers

Figure 49.3 Consumer Surplus Ray and Anderson: Krugman’s Economics for AP, First Edition Copyright © 2011 by Worth Publishers

Figure 49.6 The Supply Curve for Used Textbooks Ray and Anderson: Krugman’s Economics for AP, First Edition Copyright © 2011 by Worth Publishers

Figure 49.7 Producer Surplus in the Used-Textbook Market Ray and Anderson: Krugman’s Economics for AP, First Edition Copyright © 2011 by Worth Publishers

Figure 49.8 Producer Surplus Ray and Anderson: Krugman’s Economics for AP, First Edition Copyright © 2011 by Worth Publishers