Assume the market in the graph shown with demand D and supply S1 is in equilibrium at a quantity of 5 units. Consumer surplus is:
A. $45.
B. $9.
C. $10.
D. $5.
Answer: D
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In a perfectly competitive market, in the long run a permanent decrease in the market demand results in a smaller number of firms
Indicate whether the statement is true or false
Which of the following is an advantage of tradable pollution permits?
a. Each firm is allowed to pollute exactly the same amount. b. Revenue from the sale of permits is greater than revenue from a corrective tax. c. The initial allocation of permits to firms does not affect the efficiency of the market. d. Firms will engage in joint research efforts to reduce pollution.
The profit-maximizing monopolist always selects that output at which ___________ is equal to __________.
Fill in the blank(s) with the appropriate word(s).
If the opportunity costs of producing a good increase as more of that good is produced, the economy's production possibility frontier will be
A. a negatively sloped straight line. B. negatively sloped and "bowed inward" toward the origin. C. negatively sloped and "bowed outward" from the origin. D. a positively sloped straight line.