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    Principles of Microeconomics
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    Exam 7: Consumers, producers, and the Efficiency of Markets
  5. Question
    Consider the Following Two Equations
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Consider the Following Two Equations

Question 203

Question 203

Essay

Consider the following two equations:
1) Total surplus = Consumer surplus + Producer surplus
2) Total surplus = Value to buyers - Cost to sellers
Show how equation (1) can be used to derive equation (2).

Correct Answer:

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Start with equation (1): Total surplus =...

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