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#cfa #cfa-level-1 #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4
In a fundamental sense, total surplus is a measure of society’s gain from the voluntary exchange of goods and services. Whenever total surplus increases, society gains.
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3.11. Total Surplus—Total Value minus Total Variable Cost
ds on the steepness of the demand and supply curves. If the supply curve is steeper than the demand curve, more of the surplus is being captured by producers. If the demand curve is steeper, consumers capture more of the surplus. <span>In a fundamental sense, total surplus is a measure of society’s gain from the voluntary exchange of goods and services. Whenever total surplus increases, society gains. An important result of market equilibrium is that total surplus is maximized at the equilibrium price and quantity. Exhibit 14 combines the supply curve and the demand curve to show mar


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