Consumer and producer surplus

In this video we study the important concepts of producer and consumer surplus. There is usually a difference between the market price and the price that consumers would have been willing to pay, and producers are willing to accept. Consumer surplus can be shown on a demand curve diagram as the difference between the market price, and what consumers would have been willing to pay. Producer surplus can be shown on a supply curve diagram as the difference between the market price and what producers would have been willing to accept.
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