Use the Following to Answer Question

question 229

Multiple Choice

Use the following to answer question:
-(Figure: Consumer Surplus II) Look at the figure Consumer Surplus II.If the price of the good decreases from $2 to $1,consumer surplus will increase by:

• A)$5.
• B)$10.
• C)$25.
• D)$35.

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Definitions:

Competitive Level

The extent of competition within a market, characterized by the number of firms and their ability to set prices.

Monopolist's Profits

The excess earnings a monopolist obtains over what it would earn in a competitive market due to its market power.

Competitive Conditions

The characteristics of a market environment that influence the level of competition between businesses, including the number of competitors, product differentiation, and barriers to entry.

Inefficiency

A situation in which resources are not used in the most productive way, leading to wasted inputs or suboptimal output.