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  • Oct 17, 2006, 03:06 PM
    Jessica24
    Consumer and producer surplus
    Why the combination of consumer and producer surplus is not maximized if there is either excess supply or demand
  • Oct 17, 2006, 03:30 PM
    RickJ
    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.
  • Oct 18, 2006, 10:08 AM
    chiefofisi
    Quote:

    Originally Posted by Jessica24
    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.

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