Refer to the Graph Shown

question 74

Multiple Choice

Refer to the graph shown. If the price of this product fell from $5.00 to $2.50 (because of a price ceiling or a shift in demand) , producer surplus would fall from:

• A) 2,000 to 500.
• B) 1,000 to 500.
• C) 1,000 to 250.
• D) 500 to 250.

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Definitions:

Initial Equilibrium

The state where supply and demand balances are met at the beginning of an analysis, setting the baseline prices and quantities.

Refining Technology

The process and technology improvements involved in purifying raw materials, particularly in converting crude oil into gasoline, diesel, and other petroleum products.

Consumers' Income

The total amount of income available to consumers for spending and saving after income taxes have been accounted for.

Equilibrium Price

The market price where the supply of goods matches demand.