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Business portal. v. t. e. In mainstream economics, economic surplus, also known as total welfare or total social welfare or Marshallian surplus (after Alfred Marshall), is either of two related quantities: Consumer surplus, or consumers' surplus, is the monetary gain obtained by consumers because they are able to purchase a product for a price ...
A reservation price can be used to help calculate the consumer surplus or the producer surplus with reference to the equilibrium price. The reason why consumers are able to experience a surplus is due to single pricing, which put simply is the same price being charged to every consumer at a given level of output. Some buyers are therefore ...
Marshallian demand function. In microeconomics, a consumer's Marshallian demand function (named after Alfred Marshall) is the quantity they demand of a particular good as a function of its price, their income, and the prices of other goods, a more technical exposition of the standard demand function. It is a solution to the utility maximization ...
The United States Consumer Price Index (CPI) is a family of various consumer price indices published monthly by the United States Bureau of Labor Statistics (BLS). The most commonly used indices are the CPI-U and the CPI-W, though many alternative versions exist for different uses. For example, the CPI-U is the most popularly cited measure of ...
Quasilinear utility. In economics and consumer theory, quasilinear utility functions are linear in one argument, generally the numeraire. Quasilinear preferences can be represented by the utility function where is strictly concave. [1]: 164 A useful property of the quasilinear utility function is that the Marshallian/Walrasian demand for does ...
However, since the consumers ultimately pay taxes for the government to purchase the surplus, the total cost to consumers (in the short run) of the price support is the sum of the loss in consumer surplus and the cost of the government purchasing the surplus off the market. 450 + 1200 = $1650
Hicksian demand function. In microeconomics, a consumer's Hicksian demand function or compensated demand function for a good is their quantity demanded as part of the solution to minimizing their expenditure on all goods while delivering a fixed level of utility. Essentially, a Hicksian demand function shows how an economic agent would react to ...
In economics, economic equilibrium is a situation in which economic forces such as supply and demand are balanced and in the absence of external influences the (equilibrium) values of economic variables will not change. For example, in the standard text perfect competition, equilibrium occurs at the point at which quantity demanded and quantity ...