Consumer surplus, producer surplus and deadweight loss

What this note covers

1. Defining consumer and producer surplus
2. Allocative efficiency at market equilibrium
3. What deadweight loss represents
4. Worked example: a restricted bicycle market in Marrong
5. Practising the labelling skill without a printed diagram
6. How different interventions create the same triangle
7. How welfare and deadweight loss are examined and what separates a top response

7 sections · 12 key terms & formulas · 6 common mistakes