The producer surplus is the amount on top of the minimum amount they are wiling to sell at. So if it falls then they are getting less on top of the minimum they would want. If it a company would be willing and able to produce a cake for £1, but they are currently selling it for £3 then the producer surplus is £2. But if a maximum price of £2 was put in place by the government, then the companies producer surplus would only be £1.
' if the government is stupid enough to restrict demand' lmao thanks for this I understand much better than reading textbooks
You’re an amazing teacher ! Thank you !
Thank you!! You are very clear with your explanation!! Gotta add that your accent rounds up the class to 10 points! :P Stay cool
Could you do a list of pros and cons of maximum price in the form of government intervention. thanks!
Thanks ...it was very clear explaination
ur good
cheers
Thanks mate
The smiley face makes this great video soooo much better lmfao!
exams in an hour shit
How was it?
same
very useful...thanks
I thought maximum price is ALWAYS set below the equilibrium or it will be deemed ineffective?
It can be set above but then yes it would be ineffective as it would just drop down to the equilibrium.
Can someone explain the fall of producer surplus to me?
The producer surplus is the amount on top of the minimum amount they are wiling to sell at. So if it falls then they are getting less on top of the minimum they would want.
If it a company would be willing and able to produce a cake for £1, but they are currently selling it for £3 then the producer surplus is £2. But if a maximum price of £2 was put in place by the government, then the companies producer surplus would only be £1.