-In the Above Figure, the Individual's Consumer Surplus Will Be

question 413

Multiple Choice

-In the above figure, the individual's consumer surplus will be highest if

• A) the price of ice cream is $5 per gallon.
• B) the price of ice cream is $3 per gallon.
• C) the price of ice cream is $2 per gallon.
• D) ice cream is free.

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Definitions:

Elastic Demand

A situation where the demand for a product changes significantly in response to a change in price.

Short Run

A period in which at least one input is fixed and cannot be changed by the firm.

Substitutes

Products or services that can replace each other, where an increase in the price of one leads to an increase in demand for the other.

Elastic Demand

Elastic Demand occurs when the quantity demanded of a product changes significantly as its price changes.