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Gains from trade in a market

Gains from trade in a market

Demand and supply diagram with equilibrium price P^* and quantity Q^*, consumer surplus shaded above price and producer surplus shaded below price

Consumer and producer surplus measure the gains from voluntary exchange. If a buyer would pay £30 but only pays £20, the buyer gains £10; if a seller would have accepted £12 but receives £20, the seller gains £8.

1.5.11 Consumer and producer surplus (A-level only) Lesson

  1. A Level
  2. /Economics
  3. /1.5.11 Consumer and producer surplus (A-level only)