Why is total surplus maximized at the market equilibrium

Assignment Help Business Economics
Reference no: EM132328754

Neither the surplus for consumers nor that for producers is maximized at the market outcome. There are various other outcomes where either side is better off than at the market equilibrium. Yet, where is the total surplus the greatest? It's when we hit the market outcome-where the demand and supply curves intersect. Why is total surplus maximized at the market equilibrium?

Reference no: EM132328754

Questions Cloud

What is a charismatic leader : What is a charismatic leader? Explain, example (do not give an example of Mr. Schultz)
Supply functions for 24-can beer case in houston : Assume the demand function and the supply functions for 24-can beer case in Houston are:
Homeostasis is of major importance to all organ systems : The maintenance of homeostasis is of major importance to all organ systems in the body and the overall survival of the individual.
How do coping strategies help clients prevent relapse : How do coping strategies help clients prevent relapse? Present at least two examples of coping strategies and explain how they may benefit the client.
Why is total surplus maximized at the market equilibrium : It's when we hit the market outcome-where the demand and supply curves intersect. Why is total surplus maximized at the market equilibrium?
What are the three most important takeaways : What are the three most important takeaways/lessons from the material provided in this module? (100 words or more). How is the material provided in this module.
Impact gdp and employment during recession : Let me be more specific, how does fiscal policy impact GDP and employment during recession?
What types of biosecurity protocols : This is especially true when raising swine. What types of biosecurity protocols might you find if you were to visit a swine farm?
Interest rates leads to lower unemployment rates : How does lowering interest rates leads to lower unemployment rates? discuss the mechanism of this process

Reviews

Write a Review

Business Economics Questions & Answers

  Economics assignment

This document contains various important questions and their appropriate answers in the subject field of Economics.

  Demand and supply curves

Economics is the study of the principles governing the allocation of scarce means among competing ends when the objective of the allocation is to maximize the attainment of the ends.

  Long-run perfectly competitive equilibrium for the firm

Evaluate Government intervene and correct this situation?(a) Explain the concept of a concentration ratio. A rise in the price of magarine Explain the impact of external costs and external benefits on resource allocation long-run perfectly c..

  Supply and demand diagrams

Explain each of the following using supply and demand diagrams,  With the use of a graph, explain how these two programs affect cigarette consumption and the price of cigarettes.

  Case study: fisher-price toys

The case study of the Fisher-Price Toys, Inc., a popular case in basic economics and management from the prestigious Harvard Business School.

  Draw the production possibility curve

Draw the production possibility curve and a. Define consumer surplus and producer surplus.

  Tax revenue

The Australian government administers two programs that affect the market for cigarettes

  Maximize total welfare

How many tickets to sell to maximize total welfare.

  Difference between the cv and the ev

The change in consumer surplus (?CS) is not "theoretically" justifiable like the CV and EV but it continues to be the most widely used measure of consumer welfare change. Explain how this can be reconciled

  Depict von neumann-morgenstern utility index u in a diagram

Depict the von Neumann-Morgenstern utility index u in a diagram

  What is the market solution

What is the market solution (market price and quantity) and What is the total surplus of the society under the market solution

  Calculate gross national product and net national product

Calculate gross national product and net national product

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd