Refer to Figure 29

question 114

Multiple Choice

Refer to Figure 29.1. At a price of P₁ in Figure 29.1, there would be a

• A) Shortage measured by the distance Q₁ to Q₅.
• B) Shortage measured by the distance Q₁ to Q₃.
• C) Surplus measured by the distance Q₁ to Q₅.
• D) Surplus measured by the distance Q₂ to Q₄.

---

Definitions:

Economies Of Scale

The cost advantages that businesses obtain due to the scale of operation, with cost per unit of output decreasing with increasing scale.

Industry Structures

The organizational characteristics and competitive dynamics of a market, including the number of firms, product differentiation, and barriers to entry.

Allocative Efficiency

A scenario in resource distribution where making one individual's condition better inevitably leads to worsening another's.

Economic Profit

The difference between a firm's total revenues and its total economic costs, including both explicit and implicit costs.