Total Surplus Is Represented by the Area

question 99

Multiple Choice

Total surplus is represented by the area

• A)under the demand curve and above the price.
• B)above the supply curve and up to the price.
• C)under the supply curve and up to the price.
• D)between the demand and supply curves up to the point of equilibrium.

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Definitions:

Elasticity of Demand

An indicator of the responsiveness of the quantity of a good demanded to its price alterations, showing how sensitive buyers are to changes in its cost.

Tax Burden

The total amount of taxes paid by individuals or businesses relative to their income, often discussed in the context of debates over fairness and economic policy.

Elastic

Describes a situation in which the demand or supply for a good or service changes significantly when its price changes.

Inelastic

A situation in which the demand or supply for a product does not change significantly in response to price changes.