Download Figure 13-1: Consumer surplus for lectures P Consumer surplus A

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Figure 13-1: Consumer surplus for lectures
P
Consumer surplus
$100
0
A
Person 100
Quantity of people
Figure 13-2: Consumer surplus after a price increase
P
$110
B
A
$100
0
Lost consumer surplus
Person
90
Person 100
Quantity of people
Figure 13-3: Consumer surplus and elasticity of demand
P
Consumer surplus
100
0
A
Person
100
Quantity of people
Figure 13-4: Producer surplus
P
Producer surplus
P
A
0
Q
Number of students
Figure 13-5: Impact of a decrease in output on welfare
p, $ per unit
Supply
R
e2
p2
S
V
MC1 = p1
e1
U
Demand
T
MC2
F
Q2
Q1
Q, Units per year
Image by MIT OpenCourseWare.
9-5
Figure 13-6: Effect of a Restriction on the Number of Cabs
Cab Firm
AC2
AC1
p, $ per ride
p, $ per ride
MC
Market
e2
p2
A
E2
p2
B
π
p1
S2
C
E1
p1
e1
1
S
D
q1 q2
n2q1
q, Rides per month
Consumer surplus, CS
Producer surplus, PS
Welfare, W = CS + PS
Q2 = n2q2
Q1 = n1q1
q, Rides per month
No restrictions
Restrictions
Change
A+B+C
B
-B - C = ∆CS
0
A
B = ∆PS
A+B+C
A+B
-C = ∆W = DWL
Images by MIT OpenCourseWare.
9-6
MIT OpenCourseWare
http://ocw.mit.edu
14.01SC Principles of Microeconomics
Fall 2011
For information about citing these materials or our Terms of Use, visit: http://ocw.mit.edu/terms.
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