dcod blackboard.com D City- Mesa Miramar-Continuing Ed. My Institution Open OnDe

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dcod blackboard.com D City- Mesa Miramar-Continuing Ed. My Institution Open OnDemand a st Chapher4 Chapter 4 Market Outcomes and Tax INQUIZITIVE Chapter 4: Market Outcomes and Tax Incidence ger e Page(s) 110-116 41What are consumer surplus and producer surplus? Explain how consumer and producer surplus affect economic well-being. When the price of a good or service the price also has tobeenough to encourage producers to sell.In this way, both parties benefit from the sale. In order to calculate producer surplus, sellers must understand their direct costs and their place on a particular good or service. enough, it will encourage consumers to buy. However costs, while consumers must consider their price based on the value they reservationhigh lowminimum opportunityreal F2 F3 FS 8

Explanation / Answer

When the price of a good or service is low enough,

It will encourage consumers to buy,however the price also has to be high enough to encourage producers to sell.

In this way both parties benefit from the sale,

In order to calculate producer surplus,

Sellers must understand their direct costs

And their opportunity costs.

While consumers must consider Reservation price

Based on the value they place on a particular good or service.

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