Asked by hannah mazzeo on Jul 12, 2024
Verified
Maximum total surplus in the market for chocolate occurs when:
A) total net gain to producers is minimized.
B) all consumers who value chocolate can buy chocolate.
C) all producers can sell their chocolate.
D) the market is in equilibrium.
Total Surplus
The sum of consumer surplus and producer surplus in a market, representing the total net benefit to society from the production and consumption of a good or service.
Chocolate Market
The economic marketplace that encompasses the production, distribution, and sale of chocolate products.
- Distinguish among producer surplus, consumer surplus, and overall economic surplus, highlighting their contrasts and parallels.
Verified Answer
NH
Nurhamizah HazriJul 12, 2024
Final Answer :
D
Explanation :
At equilibrium, the quantity of chocolate demanded by consumers is equal to the quantity supplied by producers. This means that all consumers who value chocolate at or above the market price can buy it, and all producers who are willing and able to sell chocolate can do so. Any quantity below or above equilibrium would result in a deadweight loss and a decrease in total surplus. Therefore, maximum total surplus in the market for chocolate occurs when the market is in equilibrium.
Learning Objectives
- Distinguish among producer surplus, consumer surplus, and overall economic surplus, highlighting their contrasts and parallels.