Please Refer to the Following Diagram

question 30

Multiple Choice

Please refer to the following diagram. In the diagram if the supply curve is S, the equilibrium price is:

• A)4
• B)3
• C)2

---

Definitions:

Producer Surplus

The difference between what producers are willing to accept for a good or service and the actual price they receive, reflecting extra benefit or profit.

Tax

Compulsory financial charge or some other type of levy imposed upon a taxpayer by a governmental organization in order to fund government spending and various public expenditures.

Deadweight Loss

The reduction in economic productivity resulting from a failure to reach or the impossibility of reaching the market equilibrium for a particular product or service.

Excise Tax

A tax on specific goods or services, often with the goal of discouraging their use or generating revenue.