"Unlike a monopoly, consumer surplus in a perfectly competitive market is zero." Do you agree or disagree? Why?
What will be an ideal response?
Disagree. As long as the market demand curve is downward sloping, consumer surplus, which is represented by the area between the demand curve and the market supply curve, is not zero. There is no deadweight loss, however.
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Which of the following is an example of a positional arms control agreement?
A. Highly selective admissions standards at colleges B. Public education C. Prohibiting speech that causes more harm than good D. Campaign spending limits
If the Fed wants to lower the federal funds rate through open market operations, it ________
A) decreases tax rates B) increases tax rates C) sells bonds D) buys bonds
When a group of workers finds that their job skills and work experience have become obsolete and are not needed by industry, this type of unemployment is:
A. structural. B. cyclical. C. search. D. frictional.
Macroeconomics is concerned with
A) individual business firms. B) specific markets. C) individual consumers. D) a nation's economy.