Final answer:
A proscenium stage has an arch surrounding it and is set up with the audience on the floor or in balconies; it is the largest type of stage, suitable for large productions.
Step-by-step explanation:
The type of stage that has an arch around it and is set up for the audience to sit on the floor or in balconies is known as a proscenium stage. This stage is characterized by a distinct division between the audience and the performance area, which is typically found in a conventional theatre setting. A proscenium stage is designed to provide a clear, unobstructed view of the performance from the audience's vantage point, often utilizing a slightly raked (sloped) stage and audience area to enhance visibility. It is also the largest type of stage and supports large-scale productions with elaborate sets and scenery. Other stage types include the arena stage (theatre-in-the-round) where the action happens in the center with the audience all around, and the thrust stage which extends into the audience on three sides, offering a more intimate setting but less stage technology capabilities.