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Consumer and Producer Surplus

STUDY
PLAY
Willingness to pay (p.110)
the maximum price a consumer is prepared to pay for a good
Individual consumer surplus (p.112)
the net gain to an individual buyer from the purchase of a good; equal to the difference between the buyer's willingness to pay and the price paid
Total consumer surplus (p.112)
the sum of the individual consumer surpluses of all the buyers of a good
Consumer surplus (p.112)
a term often used to refer both to individual consumer surplus and to total consumer surplus
Cost (p.117)
(of potential seller) the lowest price at which a seller is willing to sell a good
Individual producer surplus (p.117)
the net gain to an individual seller from selling a good; equal to the differences between the price received and the seller's cost
Total producer surplus (p.118)
the sum of the individual producer surpluses of all the sellers of a good
Producer surplus (p.118)
a term often used to refer both to individual producer surplus and to total producer surplus
Total surplus (p.121)
the total net gain to consumers and producers from trading in a market; the sum of the consumer surplus and the producer surplus
Market failure (p.125)
occurs when a market fails to be efficient