Consumer and Producer Surplus

Assess whether all consumers, all producers and the government in a country will benefit equally from protectionism.

When the price of a product changes, it usually changes the consumer surplus in the market.

Assess how variations in price elasticity of demand for a product determine the extent of changes in consumer surplus in a market.

‘Indirect taxes reduce consumer surplus and should therefore never be imposed in a mixed economy.’ Discuss this view.

With the help of a diagram, explain the impact of introducing an effective minimum price for a product and consider the effect on the consumer surplus for that product.

With the help of a diagram, explain the difference between producer surplus and consumer surplus and consider the extent to which producers always gain when the price of a product increases due to higher costs of production.

With the help of a diagram(s), explain what is meant by consumer surplus and producer surplus and consider whether a rise in the price of a product because of higher costs of production is likely to always reduce the consumer surplus.

With the aid of diagrams, explain how consumer surplus is affected by a decrease in the price of a luxury product with many substitutes, and of an essential product with few substitutes.

Explain what is meant by consumer surplus and use diagrams to assess the impact on consumer surplus when an indirect tax is imposed on a good with price-elastic demand compared with the impact when the demand is price-inelastic.

Use a diagram to explain how a subsidy given to producers in the market for vaccinations will affect the market price and explain the impact of this subsidy upon the consumer surplus in this market.

With the help of a supply and demand diagram, explain how the introduction of an indirect tax on a good would affect the surplus enjoyed by the consumers of that good.