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Chapter 4: Economic Efficiency, Government Price Setting, and Taxes -…
Chapter 4: Economic Efficiency, Government Price Setting, and Taxes
Consumer Surplus
Area below the demand curve and above the market price
Producer Surplus
Area above the supply curve and below the market price
Surplus
Deadweight loss
Economic efficiency
Economic Surplus
The total net
benefit to consumers and firms
Marginal Benefit
Benefit of consuming one additional unit
Marginal Cost
cost of one additional production or consuption
Price celling
Legally determined maximum price that sellers may charge
Floor Price
Legally determined minumin price that sellers may receive
Tax Incidence
Illicit Market