Asked by Hannah Emmett on Jul 09, 2024
Verified
Total surplus is:
A) the difference between price and the cost to the seller.
B) the sum of consumer and producer surplus.
C) equal to the area below the demand curve.
D) always more for consumers than producers.
Total Surplus
Total surplus is the sum of consumer surplus and producer surplus in a market, representing the total benefits to both buyers and sellers from trade.
Producer Surplus
The difference between the amount that producers are willing to sell a good for and the actual amount received by them.
- Evaluate the distinctions and commonalities that exist between producer surplus, consumer surplus, and the aggregate surplus.
Verified Answer
SM
shimshy myerowitzJul 15, 2024
Final Answer :
B
Explanation :
Total surplus is the sum of consumer and producer surplus, representing the overall benefit that both parties receive from participating in a market transaction. Option A only refers to the seller's benefit, while option C only describes the demand curve. Option D is not always true as it depends on the specific market and equilibrium price.
Learning Objectives
- Evaluate the distinctions and commonalities that exist between producer surplus, consumer surplus, and the aggregate surplus.
Related questions
Assuming That the Supply Curve of Cupcakes Is Upward-Sloping and ...
(Figure: the Market for Hamburgers)Look at the Figure the Market ...
Maximum Total Surplus in the Market for Chocolate Occurs When ...
(Table: Pumpkin Market)There Are Two Consumers,Andy and Ben,in the Market ...
Consumer Surplus Is the Amount Buyers Actually Pay for a ...