Refer to the Provided Table

question 112

Multiple Choice

$$\begin{array} { | c | c | c | } \hline \text { Producer } & \begin{array} { c } \text { Minimum } \\\text { Acceptable Price }\end{array} & \begin{array} { c } \text { Actual Price } \\\text { (Equilibrium Price) }\end{array} \\\hline A & \$ 6 & \$ 13 \\\hline B & 7 & 13 \\\hline C & 9 & 13 \\\hline D & 11 & 13 \\\hline\end{array}$$ Refer to the provided table. If the equilibrium price increases, then the

• A) producer surplus will decrease.
• B) consumer surplus will increase.
• C) producer surplus will increase.
• D) allocative e?ciency will increase.

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Definitions:

Excess Capacity

A situation where a company can produce more goods than the market demands, often leading to inefficiencies.

Monopolistic Competition

A market structure featuring many firms selling products that are similar but not identical, allowing for competition based on quality, price, and marketing.

Chronic Excess Capacity

A persistent situation in which industries or firms have more production capacity available than is being used, often leading to economic inefficiencies and reduced profit margins.

Minimum-Cost Output

The quantity of output at which the average total cost is lowest—the bottom of the U-shaped average total cost curve.