Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Market demand and consumers surplus
Suppose that the market price of a cup of coffee is K£4 but the consumer was willing to pay £9 for the first unit, £8 for the second, £7 for the third, £6 for the fourth, £5 for the fifth and £4 for the sixth.
However, he pays the market price for all the six cups. The consumer thus earns a surplus on the first five units consumed i.e.
A measure of the difference between the value that consumers place on their total consumption of some commodity and the amount they actually pay for it.
For continuous demand curves, consumer's surplus can be measured by the area under the demand curve and above the price.
NB: The shaded area represents utility which the consumers received but did not pay for i.e. consumer surplus.
Mathematically it can be calculated as follows:
£5 + £4 + £3 + £2 + £1 = £15
*Weaknesses of cardinalist approach
INDIRECT TAXES These are imposed on an individual mostly producers or traders but they can be passed on to be borne by others usually the final consumers. They can also be de
To what extent has the IMF achieved its objectives? The objective of achieving full convertibility of currencies has not been achieved. In the first place countries impose re
THE LAW OF DIMINISHING RETURNS (LAW OF VARIABLE PROPORTIONS) One of the most important and fundamental principles involved in economics called the law of diminishing return
A firm is employing 100 hours of labor and 50 tons of cement to produce 500 blocks. Labor costs Rs 4 per hour and cement costs Rs 12 per ton. For the quantities employed MPL = 3 an
For all regular goods, income elasticity is positive though the degree of elasticity fluctuates as per the nature of commodities. Consumer goods are generally categorised under thr
Marginal Utility The extra utility derived from the consumption of one more unit of a good, the consumption of all other goods remaining unchanged. The hypothesis of dimin
How Income level must remain constant - law of demand The law of demand operates only when income level of the buyer remains constant. If income rises when the price of commod
what is the theory of firm?
how it is revalent?
Suppose a firm's budget were large enough to employ 100 units of either labor or capital, the cost of a unit of labor being the same as a unit of capital. The production function i
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd