Use the Following to Answer Question

question 193

Multiple Choice

Use the following to answer question:
-(Figure: Consumer Surplus I) Look at the figure Consumer Surplus I.If the price falls from P₂ to P₁,consumer surplus increases by the area:

• A)ABP₂.
• B)AFP₁.
• C)BGF.
• D)P₁P₂BF.

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Definitions:

Price Taker

A market participant that accepts the market price as given and has no influence to alter the price of the good or service they buy or sell.

Price-Searcher Market

A market structure where sellers have some control over the price of their products because they offer unique goods or services, differentiating them from competitors.

Economic Profit

The surplus or profit generated by a company after accounting for both explicit and implicit costs, indicating financial performance.

Maximum Earning

The highest possible income or profit that an entity or individual can achieve under given conditions.