Define Consumer Surplus and Producer Surplus

question 28

Essay

Define consumer surplus and producer surplus. Explain why the equilibrium price and quantity maximizes the sum of producer plus consumer surplus (the total surplus).

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Definitions:

Real Time

Information or processes that occur or are available immediately without any delay.

Big Data

Copious amounts of information that are often collected in real time and can come from a wide variety of sources, particularly digital.

Benchmarking

The process of comparing one's business processes and performance metrics to industry bests or best practices from other companies.

Gold Standard

historically refers to a monetary system where a country's currency value is directly linked to gold, but in a broader sense, it signifies the highest quality or benchmark measure.