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9 Cards in this Set
- Front
- Back
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Price ceiling |
A legally determined max price that sellers may charge |
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Price floor |
A legally determined min price that sellers may recieve |
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Consumer surplus |
Difference between highest price a consumer is willing to pay for a good or service and the price a consumer actually pays |
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Marginal benefit |
additional benefit to a consumer from consuming one more unit of a good or service |
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Marginal cost |
additional cost to a firm of producing one more unit of a good or service |
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Producer surplus |
Difference between lowest price a firm would be willing to accept for a good or service and the price it actually recieves |
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Economic surplus |
The sum of consumer surplus and producer surplus |
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dead weight loss |
reduction in economic surplus resulting from a market not being in competitive equilibrium |
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Economic efficiency |
Market outcome where marginal benefit to consumers = to marginal cost of production and where sum of consumer surplus and producer surplus is at a max. |
