Refer to the Provided Graph of a Competitive Market

question 137

Multiple Choice

Refer to the provided graph of a competitive market. If the output level is Q₂, then there will be

• A)allocative efficiency.
• B)maximum deadweight losses.
• C)maximum consumer surplus.
• D)greater marginal benefits than marginal costs of the product.

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Definitions:

Merchant

An individual or company engaged in the business of buying and selling goods or services with the intent of making a profit.

Insanity

A mental disorder so severe that it prevents someone from having legal capacity or from being held responsible for their actions, often used as a defense in criminal trials.

Legal Effect

The consequences that a law or legal action imposes on the rights, status, or obligations of the parties involved.

Offer

A proposal presented by one party to another with the intention of creating a legally binding agreement upon acceptance.