Suppose the market demand curve for cable internet service is completely elastic. At the market equilibrium price under perfect competition, the consumer surplus in this market equals:

Question

Quizplus · Accepted Answer

When the market demand curve is completely elastic, the equilibrium price is equal to the marginal cost of production. At this price, consumers are willing to buy as much as producers are willing to supply. In a perfectly competitive market, there is no consumer surplus or producer surplus, as the price equals the cost to produce the good. Therefore, the consumer surplus in this market equals zero.

Suppose the Market Demand Curve for Cable Internet Service Is