(See related pages)
After reading this chapter you should be able to
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Understand that "elasticity," the responsiveness of quantity to changes in price, is an important concept in economics. |
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Recognize the relationship between the concept of elasticity and the appearance of the demand curve. |
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Understand and show that a market equilibrium provides both buyers and sellers with benefits. Consumers pay less than they are willing to pay and producers make a profit. Economists call the former "consumer surplus" and the latter, "producer surplus." |
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Recognize "dead weight loss," a circumstance which comes into play when prices that are too high or too low create inefficiencies. |