I'm studying problem that requires me to calculate social welfare in a monopoly setting.
But I dont know what social welfare is, and I can't find it in my book or by googling. What am I asked to compute?
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By social welfare your professor probably means total economic surplus which is the sum of consumer's surplus and producer's surplus.
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$\begingroup$ You can enlarge your answer by providing a mathematical definition for consumer surplus (i.e. the reservation price minus the paid price) and producer surplus (i.e. the profits). $\endgroup$ – one_teach_wonder Oct 24 '17 at 14:51
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1$\begingroup$ @one_teach_wonder Profits are not the same as producers surplus (the difference is the fixed cost). But yes, a more detailed answer would be nice, if you care to make one I would be happy to upvote it. $\endgroup$ – Giskard Oct 24 '17 at 16:12
