The Figure Below Shows the Demand and Supply Curves in the Market

question 45

Multiple Choice

The figure below shows the demand and supply curves in the market for elementary education. Figure 13.1
In the figure,
D: Private demand curve for elementary education
D + s: Demand curve which includes public benefits
S: Supply curve of education
Price and Quantity have been taken on vertical and horizontal axes respectively.
According to Figure 13.1, the outcome of an unregulated, unsubsidized market would be:

• A)point a.
• B)point b.
• C)point c.
• D)point d.
• E)point e.

---

Definitions:

Producer Surplus

The difference between what producers are willing to accept for a good or service versus what they actually receive in the market.

Allocative Efficiency

A state of resource allocation where goods and services are distributed according to consumer preferences in a way that maximizes utility.

External Benefits

Advantages that result from a product or service's use that affect someone other than the direct consumer or producer, often justifying government intervention.

Consumption

The process by which goods and services are used by households and individuals, leading to a decrease in their availability.