The sum of consumer and producer surplus measures the total benefits that buyers and sellers receive from participating in a market.

Question

Quizplus · Accepted Answer

Consumer surplus represents the difference between what consumers are willing to pay and what they actually pay, while producer surplus represents the difference between what producers are willing to accept for a good or service and the actual price they receive. The sum of these surpluses measures the total economic benefit to both buyers and sellers from participating in a market.

The Sum of Consumer and Producer Surplus Measures the Total