In the Following Figure,the Producer Surplus for an Output Level

question 12

Multiple Choice

In the following figure,the producer surplus for an output level of 3 units is equal to ________.

• A)$7.50
• B)$5.25
• C)$4.50
• D)$2.25

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Definitions:

Free Market

An economic system where prices for goods and services are determined by the open market and consumers, with minimal government intervention.

Optimal Pigouvian Tax

A type of tax designed to correct the negative externalities of a market activity, set at a level that equates the marginal social cost of the externality with the marginal private cost.

Socially Optimal

A condition where resources are allocated in a way that benefits society as a whole, maximizing overall welfare.

Pollution

The introduction of contaminants into the natural environment that cause adverse change, affecting air, water, and land.