chapter 7

the sum of consumer and producer surplus

directs consumers and producers to maximize their surplus 
-  leads to the highest level of social welfare

is measured by the area below the demand curve and above the equilibrium price line.

is found as the area above the supply curve and below the equilibrium price

is simply the sum of consumer surplus and producer surplus.

A​ non-market price imposition is a

In the figure on the​ right, the imposition of price Upper P Subscript Upper CPC results in a ___ in the market

If the imposed price Upper P Subscript Upper CPC were​ removed, market forces would rectify the mismatch between quantity demanded and quantity supplied by pushing the price

This price adjustment would eliminate the mismatch by ___ market participants to change their behavior.

Reservation value of a buyer reflects her​ ________.

The marginal cost and total revenue of a firm are​ $5 and​ $275, respectively. The reservation value of the seller in this case is

In a perfectly competitive​ market, if the market price is lower than the average total cost of​ production: