The Diagram Below Shows the Demand and Supply Curves in a Perfectly

question 21

Multiple Choice

The diagram below shows the demand and supply curves in a perfectly competitive market.
FIGURE 12-5
-Refer to Figure 12-5. If output in this market were Q3, and the price was still equal to its free-market level, the loss in producer surplus relative to the competitive equilibrium would be illustrated by area

• A) 1.
• B) 2.
• C) 3.
• D) 4.
• E) 3 + 4.

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Definitions:

Recreation

Activities done for enjoyment when one is not working, including sports, hobbies, and other leisure activities.

Leisure

Time free from the demands of work or duty, where individuals can engage in activities for enjoyment and relaxation.

Paid Work

Labor or tasks completed in exchange for monetary compensation.

Recreational Activity

Activities engaged in for enjoyment, relaxation, or leisure, not as a profession or for compensation.