Question
As the actual market quantity increases past the efficient quantity, what is true? Some of the previous economic surplus gained is offset by the deadweight
As the actual market quantity increases past the efficient quantity, what is true?
Some of the previous economic surplus gained is offset by the deadweight loss from overproduction.
The marginal benefit of each additional transaction exceeds the marginal cost.
The marginal cost of each additional transaction exceeds the marginal benefit.
Economic surplus is maximized.
b What is the significance of price in any assessment of economic surplus?
Price determines total economic surplus.
Price determines how the surplus is distributed between buyers and sellers.
A change in price shifts the curves, and thus shifts economic surplus.
Price determines deadweight loss.
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