Author Question: A socially optimal price: A) maximizes consumer surplus and minimizes producer surplus. B) ... (Read 285 times)

Yi-Chen · **on:** Jun 29, 2018

A socially optimal price:

A) maximizes consumer surplus and minimizes producer surplus.
B) maximizes producer surplus and minimizes consumer surplus.
C) maximizes total surplus.
D) maximizes deadweight loss.

Question 2

Which of the following statements differentiates between a shortage and a surplus?

A) A shortage occurs when price is held at the equilibrium price, but a surplus occurs when price is held above the equilibrium price.
B) A shortage occurs when price is held below the equilibrium price, but a surplus occurs when price is held at the equilibrium price.
C) A shortage occurs when quantity supplied exceeds quantity demanded, whereas a surplus occurs when quantity demanded exceeds quantity supplied.
D) A shortage occurs when quantity demanded exceeds quantity supplied, whereas a surplus occurs when quantity supplied exceeds quantity demanded.