Total Economic Surplus Is Greatest When

question 56

Multiple Choice

Total economic surplus is greatest when:

• A)price controls keep prices low enough that most consumers can purchase the item.
• B)consumer surplus and producer surplus are equal.
• C)consumer surplus exceeds producer surplus.
• D)the market is in equilibrium.

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Definitions:

Fiscal Year

A 12-month period that a company uses for accounting purposes and preparing financial statements.

Discounted Note

A promissory note that is issued at a price lower than its face value and repaid at its face value at maturity.

Cash Proceeds

The total amount of cash received from transactions, often relating to the sale of assets or products.

Discounted Note

A financial instrument involving a loan document that has been reduced from its face value to reflect current market interest rates.