Concise grasp on Consumer surplus & Producer Surplus:

Pricing Decisions

Consumer surplus:- we can say that the difference in price which consumer is willing to pay and which consumer actually pays is called as consumer surplus.

Producer Surplus:- The difference between the price which producer is willing to sell and the price which he actually sold is called producer surplus.

There are some goods which have negative income elasticity those goods are called Inferior Goods.

And the positive price elasticity of goods is called Veblen.

Revenue,pricing & elasticity

* Goods is elastic it will reduce price to increase revenue.

* Goods is inelastic it will increase price to increase revenue.

* Unitary elastic will hold price constant with no effect and revenues.

                            Budget set.                  Rough note