Class 11 Consumer and Producer Surplus.pptx

Engineering economics is the application of economic principles to engineering projects and decision-making. It involves evaluating costs, benefits, and trade-offs to determine the most cost-effective solutions for engineering problems. Key aspects include cost estimation, budgeting, economic feasibility, and optimizing resource use to maximize project efficiency and profitability.

1. Consumer and Producer Surplus

2. Willingness to pay Willingness to pay: the maximum amount that a buyer will pay for a good

3. consumer surplus Consumer surplus: the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it.

4. Using the Demand Curve to Measure Consumer Surplus

5. How a Lower Price Raises Consumer Surplus

6. How Price Affects Consumer Surplus

7. Producer Surplus Cost: the value of everything a seller must give up to produce a good producer surplus: the amount a seller is paid for a good minus the seller’s cost of providing it.

8. Using the Supply Curve to Measure Producer Surplus

9. How Price Affects Producer Surplus

10. Market Efficiency

11. Market Efficiency Efficiency: the property of a resource allocation of maximizing the total surplus received by all members of society. Equality: the property of distributing economic prosperity uniformly among the members of society.

12. Consumer and Producer Surplus in the Market Equilibrium

13. The Efficiency of the Equilibrium Quantity