Consumer Surplus Is Highest When the Demand Curve Is __________;

question 1

Multiple Choice

Consumer surplus is highest when the demand curve is __________; producer surplus is greatest when the supply curve is _________.

• A) elastic; elastic
• B) inelastic; inelastic
• C) perfectly elastic; perfectly inelastic
• D) inelastic; elastic

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Definitions:

Long Run

A period in economics where all factors of production and costs are variable, allowing for full adjustment to changes.

Operate

The act of controlling or managing the functions of something, like machinery or a business.

Economic Profit

The distinction between the income generated from selling a product and the opportunity cost of the resources utilized.

Price

Price is the amount of money required to purchase a good or service, often determined by the balance of supply and demand in a market.