Following on from the work we completed in class, here are some notes on consumer surplus.Applying the concept:
Having completed the exercise, discuss in groups the following questions.
How could the concept of consumer surplus contribute to arriving at a decision to build a new by-pass through an area of outstanding natural beauty or a site of special scientific interest?
How might consumer surplus help us to understand why companies who exercise market power and maintain price above the equilibrium level be deemed as being 'against the public interest'?
How might a government or the EU attempt to justify paying subsidies to a business or industry?
What might be the limitations of using a concept like consumer surplus in decision making - try to think of relevant examples.
Mr Bentley
No comments:
Post a Comment