Refer to the Graph Shown

question 6

Multiple Choice

Refer to the graph shown. Total surplus is maximized when:

• A) the market is in equilibrium at price P₁ and quantity Q₁.
• B) producers are able to charge a price above P₁.
• C) consumers are able to pay a price below P₁.
• D) excess demand is maximized.

---

Definitions:

Authorized to Conduct Business

The status granted to a company or individual that fulfills the regulatory requirements to legally operate in a particular jurisdiction.

De Facto Corporation

A company that operates like a corporation and may be treated as one for legal purposes, despite not having completed formal incorporation steps.

State Incorporation Statute

Laws established by individual states governing the process, requirements, and regulations for the incorporation of businesses within their jurisdiction.

Closely Held

Refers to a business that has a small number of shareholders, often family members, without public stock offerings.