Domestic aggregate surplus:
A) is the sum of consumer surplus, deadweight loss and government revenue.
B) is the sum of domestic producer surplus and government revenue.
C) is the sum of domestic producer surplus and consumer surplus.
D) is the sum of consumer surplus, domestic producer surplus and government revenue.

Question

Quizplus · Accepted Answer

Domestic aggregate surplus is the total welfare gain to domestic consumers and producers in a market. It includes both consumer surplus (the difference between what consumers are willing to pay and what they actually pay) and producer surplus (the difference between the market price and what producers are willing to accept). Additionally, government revenue from taxes or subsidies can also contribute to domestic aggregate surplus. Therefore, the correct answer is D, as it includes all three components of domestic aggregate surplus: consumer surplus, domestic producer surplus, and government revenue.

Domestic Aggregate Surplus