The area between the market price and the supply curve provides a measure of:
a. consumer surplus
b. producer surplus.
c. consumer surplus plus producer surplus.
d. marginal utility.
b
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When economic profits are zero in equilibrium, the firm's revenue must be sufficient to cover all opportunity costs
a. True b. False Indicate whether the statement is true or false
Suppose televisions are a normal good and buyers of televisions experience a decrease in income. As a result, consumer surplus in the television market
a. decreases. b. is unchanged. c. increases. d. may increase, decrease, or remain unchanged.
Consider the production possibilities frontier displayed in the figure shown. A society should choose to produce:
A. at any point on the frontier rather than inside it. B. at any point that produce some of each good. C. at point C because it is the safest. D. at point B because it represents the most the society can produce.
Suppose the market demand curve for pizza can be expressed as QD = 100 - 2P + 3Pb, where QD is the quantity of pizza demanded, P is the price of pizza, and Pb is the price of a burrito. What is the relationship between burritos and pizza, from the point of view of consumers?
A) They are independent. B) They are complements. C) They are substitutes. D) Not enough information to answer the question.