The sum of consumer and producer surplus measures the total benefits that buyers and sellers receive in a market.

Question

Quizplus · Accepted Answer

Consumer surplus measures the extra value or satisfaction that consumers receive from a product beyond what they paid for it, while producer surplus measures the extra revenue that producers receive from selling a product beyond their costs of production. The sum of the two is the total benefit received by both parties in the transaction.

The Sum of Consumer and Producer Surplus Measures the Total