AP®︎ Microeconomics: Topic 2.6 Flashcards

The price and output level at the intersection of supply and demand.

The maximum price a consumer is willing and able to pay for a good.

The lowest price a producer is willing and able to accept for a good.

Consumer surplus is above price and below demand; producer surplus is below price and above supply.

Use triangle area formula: one-half times base times height for each shaded region.

The sum of consumer surplus and producer surplus in a market.

Resources go to the buyers who value them most at the quantity society wants.

A trade in which both buyer and seller expect to be better off.

The intersection where quantity demanded equals quantity supplied, creating no shortage or surplus.

The gap between buyers' willingness to pay and market price, individually or in total.

The gap between market price and sellers' minimum acceptable price, individually or in total.

The largest combined consumer and producer surplus occurs at the competitive equilibrium quantity.