While we typically analyze the operation of markets by examining the movements of price or quantity, we may also be interested in asking broader questions about how much market participants, both consumers and producers, benefit from consuming or producing a certain good. In this unit, you will learn how to calculate producer and consumer welfare in a given market. You will also learn how to analyze the changes in social welfare that result when policies are implemented that alter the market equilibrium.
Image courtesy of Lance Ball on Flickr.
Image courtesy of Vikseskogen on Flickr.