When Drawing a Demand Curve

question 84

Multiple Choice

When drawing a demand curve,

• A)demand is measured along the vertical axis,and price is measured along the horizontal axis.
• B)quantity demanded is measured along the vertical axis,and price is measured along the horizontal axis.
• C)price is measured along the vertical axis,and demand is measured along the horizontal axis.
• D)price is measured along the vertical axis,and quantity demanded is measured along the horizontal axis.

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Definitions:

Consumer Surplus

The variance between the aggregate amount consumers can and will pay for a good or service versus the amount they actually spend on it.

Producer Surplus

is the difference between what producers are willing to accept for a good or service versus what they actually receive.

Equilibrium Price

The price at which the quantity of a good or service demanded by consumers equals the quantity supplied by producers, resulting in a stable market.

Producer Surplus

The difference between what producers are willing to accept for a product versus what they actually receive, measured by the area above the supply curve and below the market price.