Consumer surplus, producer surplus, and allocative efficiency

Key Questions

• What is allocative efficiency?

  The efficient allocation of limited resources mostly being factors of production to complete a task.

  sinclairm5 · 2 · Jun 7 2015

• What is a graphical example of a consumer surplus?
• How is allocative efficiency achieved in pure competition?
• How can allocative efficiency be achieved?
• Why is consumer surplus a measure of consumer welfare?
• Why are consumer surpluses useful?
• What is allocative efficiency?
• Who benefits from a consumer surplus?
• What increases the consumer surplus?
• Why is the producer surplus highest in a monopoly?