Total surplus is the area_______________?
Correct answer: C. below the demand curve and above the supply curve
- A. above the supply curve and below the price
- B. below the demand curve and above the price
- C. below the demand curve and above the supply curve
- D. below the supply curve and above the price
- E. above the demand curve and below the price
Explanation
Total surplus combines consumer surplus and producer surplus, so it is the area between the demand curve, which shows value, and the supply curve, which shows cost. This corresponds to option c.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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