Figure 7-2 -Refer to Figure 7-2.If the Equilibrium Price Rises from $60

question 38

Multiple Choice

Figure 7-2
-Refer to Figure 7-2.If the equilibrium price rises from $60 to $120,what is the producer surplus to new producers in the market?

• A) $1,200
• B) $2,400
• C) $3,600
• D) $4,800

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Definitions:

Inelastic Demand

A situation where the demand for a product does not significantly change with a change in its price.

Price Inelastic

Refers to a situation where the quantity demanded or supplied of a good or service changes by a smaller percentage than changes in price.

Alcohol Tax

A tax imposed on the sale of alcoholic beverages, often used as a means to discourage excessive drinking and to generate government revenue.

Revenue

The total amount of money generated by a company from its business activities, such as sales of goods or services, before any expenses are subtracted.