The Figure Below Shows the Result of a Price Fixing

question 20

Multiple Choice

The figure below shows the result of a price fixing scheme that raised price above competitive levels at point C to a price of $15 at point M. The formation of this cartel caused a deadweight loss to society of $____________ of social surplus.

• A)$5,000
• B)$15,000
• C)$20,000
• D)$31,250

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Definitions:

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Antibodies

Bodily chemicals that seek out and destroy foreign invaders such as bacteria or viruses.

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Networks of interconnected neurons in the brain that are responsible for processing specific types of information and coordinating behaviors.

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A condition or state of being excessively active, which can manifest in physical or mental realms.