Assume the Market Was in Equilibrium in the Graph Shown

question 1

Multiple Choice

Assume the market was in equilibrium in the graph shown. If the market price were set to $12, which of the following is true?

• A) For those still interacting in the market, some surplus is transferred from buyer to seller.
• B) For those still interacting in the market, some surplus is transferred from seller to buyer.
• C) Producers gain the surplus of those buyers who dropped out of the market.
• D) Consumers gain the surplus of those sellers who dropped out of the market.

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Definitions:

Nearest Cent

Rounding a monetary amount to the closest one-hundredth of the currency unit, such as a dollar.

Semiannual Compounding

Another term for compounded semi-annually, indicating that interest is added to the principal sum twice per year.

Nearest Cent

Rounding a monetary amount to the closest one-hundredth of a currency unit.

Future Value

The value of an investment or asset at a specific future date, considering factors like interest rates or earnings growth.