Asked by Blair Harrell on Jul 22, 2024
Verified
Suppose a competitive market has a downward-sloping demand curve and a horizontal supply curve.If the supply curve shifts downward,equilibrium price will _____,equilibrium quantity will _____,consumer surplus will _____,and producer surplus will _____.
A) decrease;increase;increase;decrease
B) decrease;decrease;increase;not change
C) decrease;increase;increase;not change
D) decrease;increase;not change;increase
Consumer Surplus
The difference between the maximum price consumers are willing to pay for a good or service and the actual price they pay.
Producer Surplus
The disparity between the price that producers are ready to accept for a product or service and the price they actually obtain.
Equilibrium Price
The cost where the amount of a product or service consumers want to buy matches the quantity that producers are willing to sell.
- Assess the influence of supply and demand alterations on the aggregate surplus.
- Discriminate between producer surplus and consumer surplus.
Verified Answer
Learning Objectives
- Assess the influence of supply and demand alterations on the aggregate surplus.
- Discriminate between producer surplus and consumer surplus.
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