High School

Total surplus can be calculated as:

1) Value to buyers minus amount paid by sellers
2) Amount received by sellers minus cost to sellers
3) Cost to sellers minus value to buyers
4) Value to buyers minus cost to sellers

Answer :

Final answer:

Total surplus in economics is calculated as the value to buyers minus the cost to sellers, which is the sum of consumer and producer surplus. It measures the overall economic welfare. Inaccurate production levels may cause a deadweight loss, reducing total surplus.

Explanation:

In the context of economics, the total surplus can be calculated as the value to buyers minus the cost to sellers. This represents the sum of the consumer surplus and the producer surplus. Consumer surplus is the difference between the price that consumers are willing to pay and the market equilibrium price. Producer surplus, on the other hand, represents the difference between the price at which producers are willing to sell a product and the market equilibrium price. The sum of these two surpluses gives us the total surplus. Inaccurate levels of production can result in a deadweight loss, which is a decrease in total surplus.

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