Chp. 7: Consumer, Producer, and Efficiency of Market

Chapter seven is about a buyer's willingness to pay for a good. This means the maximum amount the buyer will pay for the good. It brings up the term welfare economics which is how the allocation of resources affect economic well-being. The chapter also discussed consumer which is the amount of money they are willing to pay minus the amount of money they actually paid. The consumer surplus shows the benefits that a consumer receives after participating in a market. When measuring the consumer surplus it is good to know that it is similar to the demand curve and the vertical drops in the line represent a buyer’s willingness to pay. The area below the demand curve and above the price is the consumer surplus. Since  in a consumer’s surplus, the highest willingness to pay has the largest amount of surplus, however, the producer’s surplus is greater when the producers have the lower cost.