Refer to the Graph Shown

question 186

Multiple Choice

Refer to the graph shown. If consumers had to pay $7.50 per unit for this product instead of $5.00 per unit (because of a price floor or a shift in supply) , consumer 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:

Operating Expense

Costs associated with the day-to-day operations of a business, such as rent, utilities, and payroll, excluding cost of goods sold.

Purchases Discounts

An allowance given by the seller to the buyer for early payment or for buying in large quantities.

Net Purchases

The total cost of goods bought for resale, after subtracting returns, allowances, and discounts.