-Refer to the Above Figure

question 135

Multiple Choice

-Refer to the above figure. If the economy is currently operating at point C, then there is

• A)a stable long-run equilibrium situation.
• B)a recessionary gap.
• C)an inflationary gap.
• D)unemployment.

---

Definitions:

Deadweight Loss

The inefficiency caused by market distortion, typically due to taxes or subsidies, leading to a loss of economic efficiency.

Price Discriminate

A pricing strategy where a seller charges different prices for the same product or service to different customers, based on the willingness to pay of different market segments.

Resale

The act of selling a product or service again, often used goods, to another buyer.

Perfectly Price Discriminate

A pricing strategy where a seller charges the maximum possible price for each unit consumed that each buyer is willing to pay, thus capturing the entire consumer surplus.