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Consumer and producer surplus

When demand rises, do prices rise too?

Understanding how changes in demand affect market prices is fundamental within economics and yet, surprisingly, empirical evidence does not always support the standard theoretical predictions. Luke Garrod and Chris Wilson investigate and review some possible explanations

One of the first lessons learned by economics students is that prices rise in response to an increase in demand. This intuitive prediction is confirmed in countless examples:

■ football ticket prices are higher for more popular matches

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Consumer and producer surplus

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