Figure 7-28 -Refer to Figure 7-28.At the Quantity Q3

question 62

Multiple Choice

Figure 7-28
-Refer to Figure 7-28.At the quantity Q3,

• A)the market is in equilibrium.
• B)consumer surplus is maximized.
• C)the sum of consumer surplus and producer surplus is maximized.
• D)the marginal value to buyers is less than the marginal cost to sellers.

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Definitions:

Surplus

The amount of an asset or resource that exceeds the portion used. In economics, it refers to a situation where supply exceeds demand.

Shortage

A situation in which demand for a good or service exceeds the available supply at the current price.

Market Equilibrium

Market equilibrium is the point where the supply of goods matches demand, leading to a stable market price.

Equilibrium Price

The rate at which the supply of a commodity or service aligns with its demand in the market.