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In equilibrium, are the consumer and producer surplus equal?
When the market is in equilibrium, is consumer surplus the same as producer surplus?
2 Answers
- Anonymous1 decade agoFavorite Answer
No, not at all. At the equilibrium point, the sum of consumer and producer surplus will be maximum. It does not mean that the consumer surplus will be equal to the producer surplus.
- Anonymous5 years ago
At equilibrium, the quantities demanded and supplied equal each other. However, you can have a different level of consumer and producer surplus depending on the actual shape of the curves. For example, you can have a more elastic demand curve and a more inelastice supply. Or vice-verse. And this can lead to a situation where the distance between supply and demand above equilibrium is more or less than the distance below it.