Refer to Resource Supply/Demand. What does area D represent?
The following questions refer to the accompanying graph, which shows the supply and demand for a resource. The owner of the resource is receiving the price P0 and is providing the quantity Q0.
a. The value that Q0 units of the resource gives to demanders.
b. The revenue generated from selling Q0 units of the resource.
c. The rent that resource owner earns from providing Q0 units.
d. The minimum payment needed for the resource owner to supply Q0 units.
d. The minimum payment needed for the resource owner to supply Q0 units.
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The total revenue test says i. Demand is elastic if a decrease in price results in an increase in total revenue. ii. Total revenue is maximized when demand is elastic. iii. Total revenue is minimized when demand is unit elastic
A) i only B) i and ii C) ii and iii D) i, ii and iii E) ii only
Other things equal, when the supply of workers is low, one would predict that market wages would be
a. relatively high. b. relatively low. c. determined solely by factors that affect demand. d. determined outside the domain of economic theory.