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ADB: An abbreviation that stands for either the African Development Bank the Asian Development Bank. The African Development Bank is a regional multilateral development institution engaged in promoting the economic development and social progress of its member countries in Africa. The Bank, established in 1964, started functioning in 1966 with its Headquarters in Abidjan, Cote d' lvoire. The Bank borrows funds from the international money and capital markets. Its shareholders are the 53 countries in Africa as well as 24 countries in the Americas, Europe, and Asia. The Asian Development Bank is a multilateral development finance institution dedicated to reducing poverty in Asia and the Pacific that engages in mostly public sector lending for development purposes in its developing member countries. They pursue this goal by helping to improve the quality of people's lives providing loans and technical assistance for a broad range of development activities. ADB raises fund through bond issues on the world's capital markets but they also rely on members' contributions. The ADB was established in 1966 and has its headquarters in Manila, Philippines. As of September of 2003, the ADB had 58 member countries.
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                           CONSUMER SURPLUS: The satisfaction that consumers obtain from a good over and above the price paid. This is the difference between the maximum demand price that buyers are willing to pay and the price that they actually pay. A related notion from the supply side of the market is producer surplus. Consumers' surplus is the extra satisfaction received when purchasing a good. The demand price is generally greater than the price actually paid. Most consumers under most circumstances receive some surplus of satisfaction. Even competitive markets overflowing with efficiency generate an ample amount of consumer surplus.Suppose, for example, that Duncan Thurly is willing and able to pay $3 for a Hot Momma Fudge Bananarama Ice Cream Sundae. This is his demand price. However, the going market price, the actual price that everyone pays for a Hot Momma Fudge Bananarama Ice Cream Sundae at the Hot Momma Fudge Bananarama Ice Cream Shoppe is $2. While Duncan is willing and able to pay $3, he pays only $2. He receives a $1 consumer surplus on this purchase. A Visual RepresentationThe demand curve for Yellow Tarantulas, a cute and cuddly creature from the Wacky Willy Stuffed Amigos line of collectibles, presented in this exhibit can be used to illustrate consumer surplus.The demand price of Yellow Tarantulas is measured on the vertical axis and the quantity demanded is measured on the horizontal axis. The negatively-sloped demand curve captures the law of demand relation between these two variables. Key to this discussion, the demand price represents the maximum price that buyers are willing and able to pay. However, they often end up paying less.For example, if the quantity demanded is 20 Yellow Tarantulas, then the demand price is $40. However, if the quantity demanded is 80 Yellow Tarantulas, then the demand price is $10. Now suppose that the going market price of Yellow Tarantulas is $30. If so, buyers are willing and able to purchase 40 Yellow Tarantulas. Click the [Going Price] button to highlight this situation. However, while the demand price for the 40th Yellow Tarantula is $30, the demand prices for the other 30 Yellow Tarantulas are greater than $30. For example, the buyer who purchased the 20th Yellow Tarantula is willing and able to pay $40. Yet, because the market price is only $30, the 20th Yellow Tarantula is purchased for $10 less than the maximum demand price. The difference between the demand price and the price paid is consumer surplus. This particular buyer gains $10 worth of consumer surplus. In fact, every Yellow Tarantula sold up to the 40th generates consumer surplus for the buyer. The 40th Yellow Tarantula is the only one with a match between demand price and price paid and no consumer surplus. The total consumer surplus associated with a $30 price can be revealed by clicking the [Consumers' Surplus] button in the exhibit. The yellow triangle beneath the demand curve, but above the $30 price, is the consumer surplus. The size of this consumer surplus triangle--while probably evident, but worth stating and demonstrating explicitly--depends on the price of the good. A higher price results in a smaller consumers's surplus and a lower price generates a larger consumer surplus. A click of the [Higher] and [Lower] buttons will reveal these alternatives. Producers' SurplusA comparable surplus from the supply side of the market is producer surplus. It too exists in efficient, competitive markets. As a matter of fact, an efficient market is one that generates the maximum total amount of consumers' and producer surpluses. A market that falls short of the maximum is NOT efficient.
Recommended Citation:CONSUMER SURPLUS, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2025. [Accessed: November 6, 2025].
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BEIGE MUNDORTLE
[What's This?]
Today, you are likely to spend a great deal of time waiting for visits from door-to-door solicitors looking to buy either a replacement battery for your pocket calculator or a how-to book on home remodeling. Be on the lookout for poorly written technical manuals.
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The first "Black Friday" on record, a friday marked by a major financial catastrophe, occurred on September 24, 1869 -- A FRIDAY -- when an attempted cornering of the gold market induced a financial crises and economy-wide depression.
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"There is no twilight zone of honesty in business. A thing is right or it's wrong. It's black or it's white. " -- John F. Dodge, automaker
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LRTC
Long Run Total Cost
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