Examlex
Sara is addicted to alcohol and is trying to decrease her consumption. However, when she drinks less, she experiences high blood pressure, increased heart rate, and anxiety. Which term best describes her experience?
Consumer Surplus
The difference in the amount consumers are prepared and have the means to pay for a service or good compared to the amount they actually do pay.
Producer Surplus
The difference between what producers are willing to accept for a good versus what they actually receive, often depicted as the area above the supply curve and below the market price.
Average Cost
The total cost of production divided by the number of goods produced; also known as per unit cost.
Average Variable Cost
The unit cost of producing each product, calculated by dividing the variable costs (costs that vary with output) by the number of units produced.
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