Total surplus is maximized at the equilibrium price and quantity. When demand increases, price increases. Explain how

Question:

Total surplus is maximized at the equilibrium price and quantity. When demand increases, price increases. Explain how total surplus is still maximized if price increases due to an increase in demand.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Microeconomics

ISBN: 978-1259163531

1st edition

Authors: Dean Karlan, Jonathan Morduch

See More Books

Question Posted: Nov 27, 2015 02:10 AM

See More Questions

The perfectly competitive DVD copying industry is composed of many firms who can copy five DVDs per day at an average cost of $10 per DVD. Each firm must also pay a royalty to film studios, and the...
The following are the various demand and supply schedules for pizza. Let's start by assuming that the demand and supply on the pizza market are D2 and S2. (a) What is the equilibrium price and...
The following diagram describes the hypothetical demand and supply for canned tuna in Canada in 2013. a. Suppose the price of a can of tuna is $4.00. What is the quantity demanded? What is the...
1. Because triangle A is congruent with triangle B, and triangle A is isosceles, it follows that triangle B is isosceles. 2. The plaque on the Leaning Tower of Pisa says that Galileo performed...
1. For the variable you identify, compute the appropriate numerical descriptive measures and construct a boxplot. 2. For the variable you identify, construct a graphical display. What conclusions can...
Dawson Limited issued 12%, 10-year bonds with a par value of $60,000 and semi-annual interest payments. On the issue date, the annual market rate of interest for the bonds was 10%, and they sold for...
Consider the simple linear regression model for the baseball data using Team ERA as the predictor. Find the value of the PRESS statistic and the $R^{2}$ based on PRESS for this model. What...
Branson Furniture Company has requested that you determine whether the companys ability to pay its current liabilities and long-term debts improved or deteriorated during 2012. To answer this...
Parker Inc. makes and sells toys. The information on the cost per unit is as hillews. Direct materials $2.55 Direct labor 1.20 Variable overhead 1.90 Variable marketing expense 0.40 The Tooed...
Dupont Feed bought and sold agricultural products. Dupont borrowed $300,000 from Wells Fargo Bank and gave Wells Fargo a security interest in all inventory, including after-acquired inventory. Wells...
Bill is a professional photographer. His camera is broken, and he needs a new one within the next hour, or he will miss an important deadline. Lisa is a high-school student who doesnt have a camera...
When the price of gasoline was very high in the summer of 2008, several U.S. presidential candidates proposed implementing a national price ceiling to keep fuel affordable. How would this policy have...
Read the Blitzer Bonus on page 47. The future is now: You have the opportunity to explore the cosmos in a starship traveling near the speed of light. The experience will enable you to understand the...
Chris Smith - Owner and Senior Accountant B.Ec. (Accounting major), M.Tax (UNSW), FIPA Director Chris is a registered tax agent and an accountant who has been in public practice as an accountant...
A subgroup H of S, is called transitive if the standard action by H on {1,..., n} is transitive. Show that the transitive subgroups of S3 are A3 and S3.
1. The scores of the students in the final examination are normally distributed with a mean of 72 and a standard deviation of 8. a. Find the percentage of students who scored less than 60. b. Find...
How might a retrenchment strategy and a penetration strategy be linked together? What are some other logical combinations of strategies? How may a combination of strategies be related to vision?
What are Porters generic strategies? Choose 2 different industries and give examples of companies that exhibit each strategy. Which strategy/company do you believe has the best strategy for that...
Evaluate the following limits. lim (x,y,z)(1,-1,1) xz + 5x + yz + 5y x + y
3.16. For a system with non-identical service rates (see Sect. 3.5) and a limit of N jobs in the system (Eq. 3.13), obtain an expression for the mean service time per job, E[Ts], as a function of the...
A VMT tax of 4.4 cents per mile would internalize the external cost from collisions on average, but the external cost varies with the age of the driver. As shown in Table, the external cost of young...
1. The optimal level of pollution abatement is the level at which the _________ of abatement equals the _________ of abatement. 2. The marginal cost of abatement typically _________...
1. The optimal level of pollution abatement is the level at which the _________ of abatement equals the _________ of abatement. 2. The marginal cost of abatement typically _________...
A bank can either invest money for three months at 4.00% or for nine months at 4.50%. Ignoring actual/360 day count adjustments for the purpose of this question, the three against nine FRA quote the...
Shuggy Otis, an executive at Slapfish Corp. (SC) intends to retire in 11 years. SC just announced that it will start depositing $500.00 at the end of each quarter into each of its workers' retirement...
On January 1, the Hanover Beverage Company replaced the palletizing machine on one of its juice lines. The cost of the machine was $195,000. The machine's expected life is five years or 480,000...

Total surplus is maximized at the equilibrium price and quantity. When demand increases, price increases. Explain how

Question:

Step by Step Answer:

To conclude I can say that when demand incr...View the full answer

Microeconomics

Students also viewed these Economics questions