Figure 4.4 -Refer to Figure 4.4.The Figure Above Represents the Market for Represents

question 74

Multiple Choice

Figure 4.4

-Refer to Figure 4.4.The figure above represents the market for pecans.Assume that this is a competitive market.Which of the following is true?

• A)If the price of pecans is $3 the output will be economically efficient but there will be a deadweight loss.
• B)If the price of pecans is $9 consumers will purchase more than the economically efficient output.
• C)Both 40,000 kilograms and 12,000 kilograms are economically inefficient rates of output.
• D)If the price of pecans is $3 producers will sell 12,000 kilograms of pecans but this output will be economically inefficient.

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Definitions:

Gasoline

A liquid fuel derived from petroleum, used primarily in internal combustion engines.

Deadweight Loss

A loss of economic efficiency that can occur when the equilibrium for a good or service is not achieved or is not achievable.

Consumer Surplus

The difference between what consumers are willing to pay for a good or service and what they actually pay.

Producer Surplus

The difference between the price that suppliers actually receive and the minimum price they would be willing to accept. It measures the net gains to producers and resource suppliers from market exchange. It is not the same as profit.