The Area Under the Demand Curve but Above the Equilibrium

question 342

Multiple Choice

The area under the demand curve but above the equilibrium price is called

• A) consumer surplus.
• B) producer surplus.
• C) accounting profit.
• D) economic profit.

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Definitions:

Business Entity Assumption

An accounting principle that treats a business as separate from its owners or other businesses.

Business Entities

Business entities are legal structures through which business is conducted, such as sole proprietorships, partnerships, corporations, and limited liability companies.

Owners

Individuals or entities that hold legal rights and ownership of a company or property.

Measurement

The process of determining the size, length, or amount of something, typically using standard units.