which statements are true Harold is willing to pay $25 and Maude is willing to pay $18 for a steak dinner at a fine restaurant. When the price of the steak dinner increases from $15 to $18, Harold experiences a decrease in consumer surplus, but Maude does not. Assume that at the equilibrium price, consumer surplus is $100 and producer surplus is $60. At equilibrium, total surplus is $40. Assume there are only three sellers in a particular market. The cost of production for Annie is $50, for Beth it is $40 and for Cathy it is $35. If the price in the market is $45 then Annie will sell the product but Beth and Cathy will not sell. Price ceilings and price floors usually reduce the welfare of society because quantity demanded does not equal quantity supplied if the price control is binding. Suppose that at the equilibrium price of $50, the equilibrium quantity is 400 units and consumer surplus is $8,000. If the equilibrium price falls to $40 and the equilibrium quantity increased to 450 units then consumer surplus increases by $4,500. Assume there are only three sellers in a particular market. The cost of production for Alice is $95, for Ben it is $80 and for Carla it is $75. If the price in the market is $100 then producer surplus in the market is $50. The area below a demand curve and above the price measures consumer surplus. An announcement in the news about the positive effects of green tea consumption causes consumers to increase their purchases of green tea. As a result, the equilibrium market price of green tea increases and producer surplus increases. Because price reflects a consumer’s willingness to pay, consumer surplus is the value of a good to a consumer. If the existing market price is more than equilibrium, then total surplus would increase if the price decreased and moved to its market equilibrium.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter7: Market Efficiency And Welfare

Section: Chapter Questions

Problem 5P

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which statements are true

Harold is willing to pay $25 and Maude is willing to pay $18 for a steak dinner at a fine restaurant. When the price of the steak dinner increases from $15 to $18, Harold experiences a decrease in consumer surplus, but Maude does not.
Assume that at the equilibrium price, consumer surplus is $100 and producer surplus is $60. At equilibrium, total surplus is $40.
Assume there are only three sellers in a particular market. The cost of production for Annie is $50, for Beth it is $40 and for Cathy it is $35. If the price in the market is $45 then Annie will sell the product but Beth and Cathy will not sell.
Price ceilings and price floors usually reduce the welfare of society because quantity demanded does not equal quantity supplied if the price control is binding.
Suppose that at the equilibrium price of $50, the equilibrium quantity is 400 units and consumer surplus is $8,000. If the equilibrium price falls to $40 and the equilibrium quantity increased to 450 units then consumer surplus increases by $4,500.
Assume there are only three sellers in a particular market. The cost of production for Alice is $95, for Ben it is $80 and for Carla it is $75. If the price in the market is $100 then producer surplus in the market is $50.
The area below a demand curve and above the price measures consumer surplus.
An announcement in the news about the positive effects of green tea consumption causes consumers to increase their purchases of green tea. As a result, the equilibrium market price of green tea increases and producer surplus increases.
Because price reflects a consumer’s willingness to pay, consumer surplus is the value of a good to a consumer.
If the existing market price is more than equilibrium, then total surplus would increase if the price decreased and moved to its market equilibrium.

Definition Video Definition Point where the demand and supply curves intersect. At the equilibrium price the quantity supplied of a good is equal to the quantity demanded. When the market is not in equilibrium, market surplus or market shortage occurs. The region that is above the price equilibrium indicates market surplus and the region below the price equilibrium indicates market shortage. Video

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