The diagram below shows the demand and supply curves in a perfectly competitive market. FIGURE 12- 5
-Refer to Figure 12- 5. If output in this market were Q3, and the price was still equal to its
Free- market level, the loss in producer surplus relative to the competitive equilibrium would be illustrated by area
A) 3 + 4.
B) 4.
C) 1.
D) 2.
E) 3.

Question

The diagram below shows the demand and supply curves in a perfectly competitive market.  FIGURE 12- 5
-Refer to Figure 12- 5. If output in this market were Q3, and the price was still equal to its
Free- market level, the loss in producer surplus relative to the competitive equilibrium would be illustrated by area
A) 3 + 4. 
B) 4. 
C) 1. 
D) 2. 
E) 3.

Quizplus · Accepted Answer

The Answer is E

The Diagram Below Shows the Demand and Supply Curves in a Perfectly