Which of the following is correct?
a. Consumer surplus refers to a situation in which there are more buyers than sellers in a market.
b. Producer surplus refers to a situation in which there are more sellers than buyers in a market.
c. Total surplus is measured as the area below the demand curve and above the supply curve, up to the equilibrium quantity.
d. All of the above are correct.
c
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If the demand for letters written by Abraham Lincoln is higher than the demand for letters written by John Wilkes Booth, what would have to be true for the market equilibrium prices for these letters to be equal?
A) The supply of Lincoln letters would have to be less than the supply of Booth letters. B) The supply of Lincoln letters and the supply of Booth letters would have to be equal. C) If the demand for Lincoln letters is greater than the demand for Booth letters, the market equilibrium price for Lincoln letters will always be greater than the market equilibrium price for Booth letters. D) The supply of Booth letters would have to be less than the supply of Lincoln letters.
If the customer moves first with a high price what is the best response of the shopkeeper
a. Accept the high price happily b. Walk away from the deal c. Throw the haggling customer out of your store d. Laugh at the customer's face