Asked by Harry Nayan on May 11, 2024
Verified
If there is a decrease in demand (parallel shift of demand to the right) ,assuming a positively sloped supply curve and a negatively sloped demand curve,total surplus:
A) will increase.
B) will decrease.
C) will remain the same.
D) may change,but we can't tell how.
Total Surplus
The sum of consumer surplus and producer surplus in a market, representing the total benefits to society from the production and consumption of goods or services.
Demand
The quantity of a product or service that consumers are willing and able to purchase at various prices over a given period of time.
Positively Sloped
A descriptive term used for a line or curve on a graph that moves upward to the right, indicating a direct relationship between two variables.
- Understand and appraise the correlation between supply, demand, and aggregate surplus.
- Evaluate the repercussions of modifications in supply and demand on the total surplus.
Verified Answer
Learning Objectives
- Understand and appraise the correlation between supply, demand, and aggregate surplus.
- Evaluate the repercussions of modifications in supply and demand on the total surplus.
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