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Illustrate the aspect depends onto producers and consumers surplus.
a. How much advantage do producers and consumers receive by the existence of a market?
b. How is the welfare of consumers and producers influenced by changes within market prices?
c. How are such concepts associated to demand and supply curve?
Types of surplus:
• Consumer Surplus
• Producer Surplus
• Cost
• Market Failure
The total consumer surplus produced by purchases of a good at a specified price is equivalent to the region below the demand curve but above which price.
Derive the following equilibrium for the IS-LM model:
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