Author Question: If quantity supplied is either greater or less than the equilibrium quantity, then all of the ... (Read 63 times)

kwoodring · **on:** Jul 1, 2018

If quantity supplied is either greater or less than the equilibrium quantity, then all of the following are true except:
a. total loss of surplus will depend on the shape of the demand and supply curves.
b. the resulting loss of consumer surplus will depend on the price of the good.
c. total loss of surplus will depend on the price of the good.
d. there will be an inefficient allocation of resources.

Question 2

When prices drop in response to a decline in demand for an increasing cost industry
a. producer surplus will increase but rents may decrease.
b. rent earned by elastically supplied inputs will decline by more than rent earned by inelastically supplied inputs.
c. rent earned by elastically supplied inputs will decline by less than rent earned by inelastically supplied inputs.
d. both producer surplus and rents will increase.