Suppose That a Market Is in Equilibrium

question 37

Multiple Choice

Suppose that a market is in equilibrium.The area between the demand curve and the market price is

• A)total economic surplus.
• B)producer surplus.
• C)consumer surplus.
• D)the deadweight loss.
• E)the degree of overconsumption.

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Definitions:

Economic Profits

Profits exceeding the opportunity costs of a company; considered an indicator of efficiency and entrepreneurship.

Average Total Cost

The total cost of production divided by the total quantity of goods produced, representing the cost per unit.

Average Variable Cost

The cost of labor and materials divided by the quantity of output produced, reflecting costs that change with the level of output.

Average Total Cost

The total cost of production divided by the quantity of output produced; it includes both fixed and variable costs.