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Jessica24
Oct 17, 2006, 03:06 PM
Why the combination of consumer and producer surplus is not maximized if there is either excess supply or demand

RickJ
Oct 17, 2006, 03:30 PM
That's a basic found, no doubt, in your study material: Excess cannot be maximized, period. If there's excess supply (surplus) and the demand is lower than that, then the excess is waste.

chiefofisi
Oct 18, 2006, 10:08 AM
why the combination of consumer and producer surplus is not maximized if there is either excess supply or demand
Because it is exceptional that both demand and supply are in extreme.
And both are have inverse relation, so it cannot be do so.
One increases then other should be decreases.