Welfare Concepts: Indicate whether each of the following satements is true or fa

Question

Welfare Concepts: Indicate whether each of the following satements is true or false, and explain why.


A.


Producer surplus tends to fall as the supply curve becomes more elastic.



B.


Consumer surplus tends to rise as demand becomes more elastic.



C.


The market demand curve indicates the minimum price buyers are willing to pay at each level of production.



D.


The market supply curve indicates the minimum price required by sellers as a group to bring forth production.



E.


Consumer surplus is the amount that consumers are willing to pay for a given good or service above and beyond the amount actually paid.

Explanation / Answer

a. true as supply is more elastic ,price reduces b.true as price increases c. false The market demand curve indicates the max. price buyers are willing to pay at each level of production. d. true e.true as consumer have control of price

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