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    Jessica24's Avatar
    Jessica24 Posts: 1, Reputation: 1
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    #1

    Oct 17, 2006, 03:06 PM
    Consumer and producer surplus
    Why the combination of consumer and producer surplus is not maximized if there is either excess supply or demand
    RickJ's Avatar
    RickJ Posts: 7,762, Reputation: 864
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    #2

    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's Avatar
    chiefofisi Posts: 3, Reputation: 1
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    #3

    Oct 18, 2006, 10:08 AM
    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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