Minimum price equilibrium price and social welfare

Social welfare is the economic welfare of a whole community. A perfect example is what we go through every day, you find that when you leave your house to go do some shopping, you already have this imaginable price (what you are willing to pay) of that particular commodity you are going to buy and on reaching the shop you find that the actual price on the price tag is actually lower than your expectation. This difference which you will save is what is called consumer surplus (Conrad, 2005). The producer surplus, on the other hand, is the difference between the prices which the supplier will be willing to accept and the price they actually receive at the end of the day.