x

Reading the market diagram

Reading the market diagram

Supply and demand diagram with equilibrium at P* and Q*, consumer surplus shaded above the price line and producer surplus shaded below it A demand curve shows willingness to pay for each extra unit, so economists also read it as marginal benefit. A supply curve shows the minimum price firms will accept for each extra unit, so it is also marginal cost.

1.2.8 Consumer and producer surplus Lesson

  1. A Level
  2. /Economics
  3. /1.2.8 Consumer and producer surplus