Suppose the Demand for Raspberry Frozen Yogurt Can Be Represented

question 45

Multiple Choice

Suppose the demand for raspberry frozen yogurt can be represented by the equation Q_D = 5 - 2P,and the supply is given by the equation Q_S = 3P.Which of the following is the best estimate of the consumer surplus in this market?

• A)$2
• B)$1.25
• C)$2.25
• D)$3.75

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Definitions:

Supply Equation

A mathematical representation showing the relationship between the quantity of goods suppliers are willing to produce and various influencing factors like price and production costs.

Per-Unit Tax

A tax imposed on a product based on a fixed amount for each unit sold, affecting the supply curve by increasing the cost of production.

Units Sold

The number of individual items or products that have been sold over a specific period.

Elasticity

A measure of how much the quantity demanded or supplied of a good or service changes in response to price or other factors.