Most economists agree that finding the sweet spot between consumer and producer surplus is a key to success. In this post, we will talk about what the sweet spot means and how you can find it for your company. *A good example of the sweet spot is found in the chart below. Consumer surplus starts at $123 and drops off as price increases to $324, while producer surplus stays constant until prices reach a much higher level.* As you can see from this graph, it would be better for that company to charge around $274 or so; then they will have more consumer satisfaction than if they were charging too little (consumer surplus goes down) or too high (producer surplus decreases). So what is your guess: do consumers want cheaper prices? Or are producers satisfied with the current profit margin? Have you found your sweet spot yet? Let us know! *This article was originally published on April 12th 2014.* __

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