Consumer surplus is given by the area:
a. above the supply curve but below the price
b. below the supply curve
c. below the demand curve but above the price
d. below the demand curve
e. none of the above
Ans: c. below the demand curve but above the price
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The demand for movies is unit elastic if
A) a 5 percent decrease in the price leads to an infinite increase in the quantity demanded. B) a 5 percent increase in the price leads to a 5 percent decrease in the quantity demanded. C) any increase in the price leads to a 1 percent decrease in the quantity demanded. D) a 5 percent increase in the price leads to a 5 percent increase in total revenue.
The table above shows some of the costs for a perfectly competitive firm. The firm will produce 9 units of output if the price per unit is
A) $1750. B) $200. C) $300. D) $500.
If real GDP and aggregate expenditure are less than equilibrium expenditure, what happens to firms' inventories? How do firms change their production? And what happens to real GDP?
What will be an ideal response?
In deciding whether to operate in the short run, the firm must consider the relationship between price and
A) total cost. B) average variable cost. C) total fixed cost. D) the number of buyers.