Raising prices transfers consumer surplus into producer surplus in the form of higher profits.
Original post by ineedA
Is the area lost in consumer surplus by raising price the gain in producer surplus?
yes obviously
Original post by Detiri17
Remember dead weight loss
This is what I wasn't certains about, what's the area of dead weight loss
A movement away from the market equilibrium (where marginal cost equals marginal revenue) will result in a loss of economic efficiency, an area which is neither part of consumer or producer surplus, it is the triangle area next to the 2 surpluses when not in equilibrium and in an easy example can be calculated with simple geometry. Should be easy enough to read about by searching it.
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