Question

FILL IN THE BLANKS
The ______ is that part of a producer that marks the end of it.​

Answer 1

Answer:

This lesson introduced the basics of a branch of economics known as welfare economics, which is interested in how the allocation of resources affects wellbeing. The most important concepts used in welfare analysis are total surplus and allocative efficiency

The total surplus in a market is a measure of the total wellbeing of all participants in a market. It is the sum of consumer surplus and producer surplus.

Consumer surplus is the difference between willingness to pay for a good and the price that consumers actually pay for it. Each price along a demand curve also represents a consumer's marginal benefit of each unit of consumption. The difference between a consumer's marginal benefit for a unit of consumption, and what they actually pay, represents how much benefit a consumer get's from the price they are paying. Explain consumer surplus

Producer surplus represents the difference between the price a seller receives and their willingness to sell for each quantity. Each price along a supply curve also represents a seller's marginal cost of producing each unit of production. Therefore the difference between what the price that the seller for each unit, and what it cost for the seller to produce that last unit, represents the seller's benefit from the price they are getting. Explain producer surplus

Total welfare is maximized when a market produces at its equilibrium price and quantity. This level of output is considered allocatively efficient because no other price and quantity combination can achieve a greater level of total surplus. Explain total surplus and allocative efficiency