At Equilibrium Price

question 64

Multiple Choice

At equilibrium price:

• A) consumer surplus is maximized and producer surplus is minimized.
• B) producer surplus is maximized and consumer surplus is minimized.
• C) the sum of consumer surplus and producer surplus is maximized.
• D) the sum of consumer surplus and producer surplus is minimized.

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Definitions:

Unit Cost

The calculated cost assigned to a single unit of product or service, comprising all variable and fixed costs.

Mixed Cost

A cost that contains both fixed and variable components and changes in total with the level of activity, but not proportionately.

Variable Cost

Expenses that change in proportion to the activity of a business, such as production volume or units sold.

Fixed Cost

Costs that remain constant regardless of the amount of goods produced or sold, like lease payments or employee wages.