Refer to the Accompanying Diagram to Answer the Following Questions

question 60

Multiple Choice

Refer to the accompanying diagram to answer the following questions :

-Which of the following scenarios would explain the change in equilibrium shown in the accompanying figure?

• A) an increase in an input price
• B) a decrease in the number of buyers in a market
• C) an increase in the price of a substitute good
• D) an increase in the expected future price
• E) a negative technological change

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Definitions:

Deadweight Loss

The loss of economic efficiency that occurs when the equilibrium for a good or service is not achieved, often due to market distortions like taxes or subsidies.

Tax

A compulsory monetary fee or different form of levy placed on a taxpayer by a government body to finance government expenses and various public outlays.

Opportunity Cost

The cost of choosing one option over another, represented by the value of the foregone alternative.

Deadweight Loss

An economic inefficiency occurring when there is an imbalance between supply and demand leading to a loss of economic value, often caused by government interventions like taxes or subsidies.