In a Free Market in Which an Equilibrium Price and Quantity

question 44

Multiple Choice

In a free market in which an equilibrium price and quantity prevails:

• A) consumer surplus is less than producer surplus.
• B) consumer surplus is greater than producer surplus.
• C) consumer surplus is the same as producer surplus.
• D) consumer surplus and producer surplus are maximized.

---

Definitions:

Midpoint Formula

A mathematical method used to find the midpoint or average between two points, often used in economics to calculate price or quantity averages.

Price Inelastic

Describes a situation where the demand for a product does not change significantly with a change in its price.

Total Revenue

The overall amount of money generated by a firm from its business activities, typically from the sale of goods and services before any costs are subtracted.

Midpoint Formula

A mathematical method used to calculate the elasticity of demand or supply, measuring the percentage change in quantity relative to a percentage change in price.