Figure 7-1 -Refer to Figure 7-1.When the Price Rises from P1 to from P1

question 64

Multiple Choice

Figure 7-1
-Refer to Figure 7-1.When the price rises from P1 to P2,which of the following statements is not true?

• A) The buyers who still buy the good are worse off because they now pay more.
• B) Some buyers leave the market because they are not willing to buy the good at the higher price.
• C) Buyers place a higher value on the good after the price increase.
• D) Consumer surplus in the market falls.

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Definitions:

Price Level

An index reflecting the overall cost of commodities and services within an economy during a particular period.

Short-Run Aggregate Supply Curve

A curve that represents the relationship between the total production of goods and services and the price level for output in the short-run.

Price Level

A measure of the average prices of goods and services in the economy.

Economic Conditions

The state of a country or region in terms of production, employment, and prices, and how these factors influence economic activities.