According to the Graph Shown, If the Market Goes from Equilibrium

question 7

Multiple Choice

According to the graph shown, if the market goes from equilibrium to having its price set at $10:

• A) area (C +
• E) becomes deadweight loss.
• B) area (
• B) transfers from consumer surplus to producer surplus.
• C) $12 of surplus transfers from consumers to producers.
• D) All of these are correct.

---

Definitions:

Pareto Optimal

A distribution condition in which making any person's situation better is impossible without causing harm to someone else.

Private Goods Consumption

Involves the use of goods that are excludable and rivalrous, meaning their consumption by one individual prevents another from consuming the same good.

Pareto Optimal

A condition where the distribution of resources cannot be changed without negatively impacting at least one person.

Private Goods Consumption

The act of consuming goods that are excludable and rivalrous in nature, meaning they can only be owned or consumed by one party and consumption by one person prevents consumption by another.