Download - Consumer, Producer and Community Surplus
![Page 1: Consumer, Producer and Community Surplus](https://reader036.vdocument.in/reader036/viewer/2022062520/56816248550346895dd28a12/html5/thumbnails/1.jpg)
Consumer, Producer and Community Surplus
• How much would you be willing to pay for this?
• Or this?
![Page 2: Consumer, Producer and Community Surplus](https://reader036.vdocument.in/reader036/viewer/2022062520/56816248550346895dd28a12/html5/thumbnails/2.jpg)
Consumer SurplusConsumer surplus The difference
between the highest price a consumer is willing to pay and the price the consumer actually pays.
![Page 3: Consumer, Producer and Community Surplus](https://reader036.vdocument.in/reader036/viewer/2022062520/56816248550346895dd28a12/html5/thumbnails/3.jpg)
Producer SurplusProducer surplus The difference between the lowest price a firm would have been willing to accept and the price it actually receives.
![Page 4: Consumer, Producer and Community Surplus](https://reader036.vdocument.in/reader036/viewer/2022062520/56816248550346895dd28a12/html5/thumbnails/4.jpg)
Community Surplus of Competitive Markets
Community Surplus Equals the Sum of Consumer Surplus and Producer Surplus
Economic efficiency
Occurs where the sum of consumer surplus and producer surplus is at a maximum.
![Page 5: Consumer, Producer and Community Surplus](https://reader036.vdocument.in/reader036/viewer/2022062520/56816248550346895dd28a12/html5/thumbnails/5.jpg)
The incidence of taxation on Community
Surplus
Deadweight welfare loss froman indirect tax
![Page 6: Consumer, Producer and Community Surplus](https://reader036.vdocument.in/reader036/viewer/2022062520/56816248550346895dd28a12/html5/thumbnails/6.jpg)
Deadweight loss from an indirect tax
O
S
£
Q
D
P1
Q1
Before-taxsituation
![Page 7: Consumer, Producer and Community Surplus](https://reader036.vdocument.in/reader036/viewer/2022062520/56816248550346895dd28a12/html5/thumbnails/7.jpg)
O
S
£
Q
D
P1
Q1
Before-taxsituation
Deadweight loss from an indirect tax
Consumersurplus
![Page 8: Consumer, Producer and Community Surplus](https://reader036.vdocument.in/reader036/viewer/2022062520/56816248550346895dd28a12/html5/thumbnails/8.jpg)
O
S
£
Q
D
P1
Q1
Consumersurplus
Producersurplus
Before-taxsituation
Deadweight loss from an indirect tax
![Page 9: Consumer, Producer and Community Surplus](https://reader036.vdocument.in/reader036/viewer/2022062520/56816248550346895dd28a12/html5/thumbnails/9.jpg)
O
S
£
Q
D
P1
Q1
S + tax
Q2
P2
P2 - tax
Deadweight loss from an indirect tax
![Page 10: Consumer, Producer and Community Surplus](https://reader036.vdocument.in/reader036/viewer/2022062520/56816248550346895dd28a12/html5/thumbnails/10.jpg)
O
S
£
Q
D
P1
Q1
S + tax
Q2
P2
1
2 34
6
5P2 - tax
Deadweight loss from an indirect tax
![Page 11: Consumer, Producer and Community Surplus](https://reader036.vdocument.in/reader036/viewer/2022062520/56816248550346895dd28a12/html5/thumbnails/11.jpg)
O
S
£
Q
D
P1
Q1
S + tax
Q2
P2
1
2 34
6
5P2 - tax
Deadweight loss from an indirect tax
![Page 12: Consumer, Producer and Community Surplus](https://reader036.vdocument.in/reader036/viewer/2022062520/56816248550346895dd28a12/html5/thumbnails/12.jpg)
O
S
£
Q
D
P1
Q1
S + tax
Q2
P2
1
2 34
6
5P2 - tax
Deadweight loss from an indirect tax
![Page 13: Consumer, Producer and Community Surplus](https://reader036.vdocument.in/reader036/viewer/2022062520/56816248550346895dd28a12/html5/thumbnails/13.jpg)
O
S
£
Q
D
P1
Q1
S + tax
Q2
P2
1
2 34
6
5P2 - tax
Tax revenuefor government
Deadweight loss from an indirect tax
![Page 14: Consumer, Producer and Community Surplus](https://reader036.vdocument.in/reader036/viewer/2022062520/56816248550346895dd28a12/html5/thumbnails/14.jpg)
O
S
£
Q
D
P1
Q1
S + tax
Q2
P2
1
2 34
6
5P2 - tax
Deadweightloss from tax
Deadweight loss from an indirect tax