Chapter 7

Chapter 7 goes over consumer surpluses and producer surpluses and evaluating the market equilibrium. A consumer surplus is how much consumers are willing to pay minuses what they did pay. Consumers are satisfied with the surplus because they didn't have to pay as much as they thought they would have to. A market with a high consumer surplus reflects economic well being. A producer surplus is the willingness to sell minus the cost to do something. Sellers are satisfied with a producer surplus because they are left a profit. A market with a high producer surplus reflects economic well being. An allocation of resources that boosts both surpluses is said to be efficient. AT the equilibrium price of supply and demand both surpluses are maximized. I'd give this chapter 1.5/3. It was not to hard to understand except I have one question. Wouldn't sellers want a small consumer surplus because that would mean they would get more money that the consumers are willing to pay?