Consider a market that has linear supply and demand curves, and ...

[lb_gilbert]

Consider a market that has linear supply and demand curves, and is in equilibrium. The area above the price line and below the demand curve is
 
  A) consumer surplus.
  B) producer surplus.
  C) marginal cost.
  D) marginal benefit.

Question 2

A straight-line demand curve with negative slope intersects the horizontal axis at 100 tons per week. At the midpoint on the demand curve (corresponding to 50 tons per week) the price elasticity of demand is
 
  A) 0.
  B) 0.5.
  C) 1.0.
  D) unknown without more information.

[nhea]

Answer to Question 1

A

Answer to Question 2

C