The Diagram Below Shows Supply,demand,and Quantity Exchanged of Monday Matinee

question 115

Multiple Choice

The diagram below shows supply,demand,and quantity exchanged of Monday matinee movie tickets.Assume it is a perfectly competitive market. FIGURE 12-4
-Refer to Figure 12-4.Suppose a disequilibrium price of $7.50 per movie ticket is imposed on this market.The total economic surplus is now ________,which is ________ than the total economic surplus generated at the allocatively efficient level of output.

• A)$125; $250 less
• B)$125; $125 less
• C)$187.50; $62.50 less
• D)$62.50; $125 less
• E)$187.50; $187.50 less

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Definitions:

Indifference Curves

Graphical representations of different bundles of goods that provide the same level of utility or satisfaction to a consumer.

Optimal Consumption

A situation in consumer behavior where the combination of goods and services purchased maximizes utility for the consumer, given their budget constraints.

Loaves

Units of bread that are shaped and baked in a specific size and form.

Pounds

A unit of weight commonly used in the United States and the British Imperial system, equivalent to 0.453592 kilograms.