Chapter 7 Consumers, Producers, And The Efficiency Of Markets
what is/ what should be
the study of how the allocation of resources affects economic well-being.
Willingness to Pay
buyers maximum price, measures how much that buyer values the good.
the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it. The benefit buyers receive from the good as the buyers themselves perceive it. benefit buyers receive from participating in a market.
the buyer who would leave the market first if the price were any higher
Area below the demand curve and above the price measures the consumer surplus in a market.
height of the demand curve measures the value buyers place on the good, as measured by their willingness to pay for it