Competitive Diversity
Consumer and Producer Surplus
S
CS
P*
•
•
•
•
How can cost functions differ?
Economic and Accounting Profits
Taxing a Competitive Industry
Consumer and Producer Surplus
PS
D
Q*
Lectures in Microeconomics-Charles W. Upton
Consumer and Producer
Surplus
Consumer and Producer Surplus
Consumer and Producer Surplus
S
S
CS
P*
P*
D
D
Q*
Q*
Consumer and Producer
Surplus
Consumer and Producer
Surplus
Consumer and Producer Surplus
S
CS
P*
Consumer and Producer Surplus
CS
P*
PS
PS
D
Q*
Consumer and Producer
Surplus
Q*
Consumer Surplus
S
measure the net
benefits to
consumers;
Producer Surplus
measure the net
D
benefits (aka
profits) to
producers.
Consumer and Producer
Surplus
1
Pmax
S
Pmax
CS
P*
1
2
A Simple Application
Area = Bh
A Simple Application
CS
P*
PS
D
Pmin
Q*
Area =
S
1
( Pmax − Pmin )Q *
2
PS
D
Pmin
Q*
Consumer and Producer
Surplus
Consumer and Producer
Surplus
End
©2006 Charles
W. Upton
Consumer and Producer
Surplus
2