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Consumer Surplus
In mainstream economics, economic surplus, also known as total welfare or total social welfare or Marshallian surplus (after Alfred Marshall), is either of two related quantities: * Consumer surplus, or consumers' surplus, is the monetary gain obtained by consumers because they are able to purchase a product for a price that is less than the highest price that they would be willing to pay. * Producer surplus, or producers' surplus, is the amount that producers benefit by selling at a market price that is higher than the least that they would be willing to sell for; this is roughly equal to profit (since producers are not normally willing to sell at a loss and are normally indifferent to selling at a break-even price). Overview In the mid-19th century, engineer Jules Dupuit first propounded the concept of economic surplus, but it was the economist Alfred Marshall who gave the concept its fame in the field of economics. On a standard supply and demand diagram, consumer su ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Adam Smith
Adam Smith (baptized 1723 – 17 July 1790) was a Scottish economist and philosopher who was a pioneer in the thinking of political economy and key figure during the Scottish Enlightenment. Seen by some as "The Father of Economics"——— or "The Father of Capitalism",———— he wrote two classic works, ''The Theory of Moral Sentiments'' (1759) and ''The Wealth of Nations, An Inquiry into the Nature and Causes of the Wealth of Nations'' (1776). The latter, often abbreviated as ''The Wealth of Nations'', is considered his ''magnum opus'' and the first modern work that treats economics as a comprehensive system and as an academic discipline. Smith refuses to explain the distribution of wealth and power in terms of God's will, God’s will and instead appeals to natural, political, social, economic and technological factors and the interactions between them. Among other economic theories, the work introduced Smith's idea of absolute advantage. Smith studied social philos ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Utility
As a topic of economics, utility is used to model worth or value. Its usage has evolved significantly over time. The term was introduced initially as a measure of pleasure or happiness as part of the theory of utilitarianism by moral philosophers such as Jeremy Bentham and John Stuart Mill. The term has been adapted and reapplied within neoclassical economics, which dominates modern economic theory, as a utility function that represents a single consumer's preference ordering over a choice set but is not comparable across consumers. This concept of utility is personal and based on choice rather than on pleasure received, and so is specified more rigorously than the original concept but makes it less useful (and controversial) for ethical decisions. Utility function Consider a set of alternatives among which a person can make a preference ordering. The utility obtained from these alternatives is an unknown function of the utilities obtained from each alternative, not the sum of ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Surplus Value
In Marxian economics, surplus value is the difference between the amount raised through a sale of a product and the amount it cost to the owner of that product to manufacture it: i.e. the amount raised through sale of the product minus the cost of the materials, plant and labour power. The concept originated in Ricardian socialism, with the term "surplus value" itself being coined by William Thompson in 1824; however, it was not consistently distinguished from the related concepts of surplus labor and surplus product. The concept was subsequently developed and popularized by Karl Marx. Marx's formulation is the standard sense and the primary basis for further developments, though how much of Marx's concept is original and distinct from the Ricardian concept is disputed (see ). Marx's term is the German word "''Mehrwert''", which simply means value added (sales revenue minus the cost of materials used up), and is cognate to English "more worth". It is a major concept in Karl M ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Surplus Product
Surplus product (german: Mehrprodukt, links=no) is an economic concept explicitly theorised by Karl Marx in his critique of political economy. Roughly speaking, it is the extra goods produced above the amount needed for a community of workers to survive at its current standard of living. Marx first began to work out his idea of surplus product in his 1844 notes on James Mill's ''Elements of political economy''. Notions of "surplus produce" have been used in economic thought and commerce for a long time (notably by the Physiocrats), but in ''Das Kapital'', ''Theories of Surplus Value'' and the ''Grundrisse'' Marx gave the concept a central place in his interpretation of economic history. Nowadays the concept is mainly used in Marxian economics, political anthropology, cultural anthropology, and economic anthropology. The frequent translation of the German "" as "surplus" makes the term "surplus product" somewhat inaccurate, because it suggests to English speakers that the product ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Shortage
In economics, a shortage or excess demand is a situation in which the demand for a product or service exceeds its supply in a market. It is the opposite of an excess supply ( surplus). Definitions In a perfect market (one that matches a simple microeconomic model), an excess of demand will prompt sellers to increase prices until demand at that price matches the available supply, establishing market equilibrium. In economic terminology, a shortage occurs when for some reason (such as government intervention, or decisions by sellers not to raise prices) the price does not rise to reach equilibrium. In this circumstance, buyers want to purchase more at the market price than the quantity of the good or service that is available, and some non-price mechanism (such as "first come, first served" or a lottery) determines which buyers are served. So in a perfect market the only thing that can cause a shortage is price. In common use, the term "shortage" may refer to a situation whe ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Price Support
In economics, a price support may be either a subsidy, a production quota, or a price control, each with the intended effect of keeping the market price of a good higher than the competitive equilibrium level. In the case of a price control, a price support is the minimum legal price a seller may charge, typically placed above equilibrium. It is the support of certain price levels at or above market values by the government. A price support scheme can also be an agreement set in order by the government, where the government agrees to purchase the surplus of at a minimum price. For example, if a price floor were set in place for agricultural wheat commodities, the government would be forced to purchase the resulting surplus from the wheat farmers (thereby subsidizing the farmers) and store or otherwise dispose of it. Short-term effects Example In a hypothetical market in which supply and demand are such that the equilibrium price and quantity are $5 and 500 units, respectivel ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Price Discrimination
Price discrimination is a microeconomic pricing strategy where identical or largely similar goods or services are sold at different prices by the same provider in different markets. Price discrimination is distinguished from product differentiation by the more substantial difference in production cost for the differently priced products involved in the latter strategy. Price differentiation essentially relies on the variation in the customers' willingness to payApollo, M. (2014). Dual Pricing–Two Points of View (Citizen and Non-citizen) Case of Entrance Fees in Tourist Facilities in Nepal. Procedia - Social and Behavioral Sciences, 120, 414-422. https://doi.org/10.1016/j.sbspro.2014.02.119 and in the elasticity of their demand. For price discrimination to succeed, a firm must have market power, such as a dominant market share, product uniqueness, sole pricing power, etc. All prices under price discrimination are higher than the equilibrium price in a perfectly-competitive ma ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Induced Demand
In economics, induced demand – related to latent demand and generated demandSchneider, Benjamin (September 6, 2018"CityLab University: Induced Demand"''CityLab'' – is the phenomenon whereby an increase in supply results in a decline in price and an increase in consumption. In other words, as a good or service becomes more readily available and mass produced, its price goes down and consumers are more likely to buy it, meaning that demand subsequently increases. This is consistent with the economic theory of supply and demand. In transportation planning, induced demand, also called "induced traffic" or consumption of road capacity, has become important in the debate over the expansion of transportation systems, and is often used as an argument against increasing roadway traffic capacity as a cure for congestion. Induced traffic may be a contributing factor to urban sprawl. City planner Jeff Speck has called induced demand "the great intellectual black hole in city plan ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Gross Operating Surplus
In the national accounts, gross operating surplus (GOS) is the portion of income derived from production by incorporated enterprises that are earned by the capital factor. It is calculated as a balancing item in the generation of income account of the national accounts. It differs from profits shown in company accounts for several reasons. Only a subset of total costs is subtracted from gross output to calculate the GOS. Essentially GOS is gross output ''less'' the cost of intermediate goods and services (to give gross value added) and ''less'' compensation of employees. It is ''gross'' because it makes no allowance for the depreciation of capital. A similar concept for unincorporated enterprises (e.g. small family businesses like farms and retail shops or self-employed taxi drivers, lawyers and health professionals) is gross mixed-income. Since in most such cases it is difficult to distinguish between income from labour and income from capital, the balancing item in the generati ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Deadweight Loss
In economics, deadweight loss is the difference in production and consumption of any given product or service including government tax. The presence of deadweight loss is most commonly identified when the quantity produced ''relative'' to the amount consumed differs in regards to the optimal concentration of surplus. This difference in the amount reflects the quantity that is not being utilized or consumed and thus resulting in a ''loss''. This "deadweight loss" is therefore attributed to both, producers and consumers because neither one of them benefits from the surplus of the overall production. Deadweight loss can also be a measure of lost economic efficiency when the socially optimal quantity of a good or a service is not produced. Non-optimal production can be caused by monopoly pricing in the case of artificial scarcity, a positive or negative externality, a tax or subsidy, or a binding price ceiling or price floor such as a minimum wage. Examples Assume a market for na ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Producer Surplus Graph Made By Weiyi
Producer or producers may refer to: Occupations *Producer (agriculture), a farm operator *A stakeholder of economic production *Film producer, supervises the making of films **Executive producer, contributes to a film's budget and usually does not work on set *Line producer, manager during daily operations of a film or TV series *News producer, compiles all items of a news programme into a cohesive show *Online producer, oversees the making of content for websites *Radio producer, oversees the making of a radio show *Record producer, manages sound recording *Television producer, oversees all aspects of video production on a television program *Theatrical producer, oversees the staging of theatre productions *Video game producer, in charge of overseeing development of a video game *Impresario, a producer or manager in the theatre and music industries Film and television works * ''The Producers'' (1967 film), black comedy by Mel Brooks * ''The Producers'' (2005 film), American musi ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
