Question

If supply rises by more than demand rises, equilibrium price will and equilibrium quantity will .is the difference between maximum buying price and price paid.Producers’ surplus is the difference between and selling price.

Answer 1

Answer: 1. Decrease and Increase

2. Consumer Surplus

3. Prize Received and Minimum

Explanation:

1. When the supply of a good outweighs the demand of the good then the prices will fall as a result. The law of Supply and Demand shows that when Supply rises for a good, there are more sellers and therefore the price reduces due to the fact that the good is not very rare. That is the situation when Supply is higher than demand, prices will DECREASE because there is an INCREASE in the quantity of goods in the market. I have attached a graph to explain it better.

2. Consumer Surplus is known as the difference between what you as a consumer are willing to pay for a good and what you actually pay for it. If what you're willing to pay for it is more than what you actually pay for it then it is positive and it is a good thing for you because it means you spend less.

3. Producers’ surplus is the difference between PRIZE RECEIVED and MINIMUM selling price.

The Producer surplus is the difference between what was actually paid for a good or service minus the minimum price that the producer was willing to accept for it. Again, if this is positive then it is a good thing for the Producer because it means that they make a good profit. If it is negative then even though it doesn't necessarily mean that they made a loss, it could mean that that transaction wasn't viable.