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Black market
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A market in which buying and selling take place at prices that violate government price regulations.
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Consumer surplus
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The difference between the highest price a consumer is willing to pay for a good or service and the price the consumer actually pays.
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Deadweight loss
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The reduction in economic surplus resulting from a market not being in competitive equilibrium.
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Economic efficiency
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A market outcome in which the marginal benefit to consumers of the last unit produced is equal to its marginal cost of production and in which the sum of consumer surplus and producer surplus is at a maximum.
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Economic surplus
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The sum of consumer surplus and producer surplus.
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Marginal benefit
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-The additional benefit to a consumer from consuming one more unit of a good or service.
-The demand curve is often referred to as the marginal benefit curve
-The demand curve is often referred to as the marginal benefit curve
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Marginal cost
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-The additional cost to a firm of producing one more unit of a good or service.
-The supply curve is often referred to as the marginal cost curve
-The supply curve is often referred to as the marginal cost curve
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Price ceiling
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A legally determined maximum price that sellers may charge.
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Price floor
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A legally determined minimum price that sellers may receive.
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Producer surplus
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The difference between the lowest price a firm would be willing to accept for a good or service and the price it actually receives.
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Tax incidence
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The actual division of the burden of the tax between buyers and sellers in a market.
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