The diagram below shows supply, demand, and quantity exchanged of Monday matinee movie tickets. Assume it is a perfectly competitive market. FIGURE 12- 4
-Refer to Figure 12- 4. If a disequilibrium price of $7.50 per movie ticket were imposed on this market, this market would not be allocatively efficient because
1) the sum of consumer and producer surplus would not be maximized;
2) the marginal benefit to consumers of the last movie consumed would be greater than the marginal cost to the seller;
3) the marginal cost to the seller of the last movie consumed would be more than the marginal benefit to consumers.
A) 2 only
B) 1 only
C) 3 only
D) 1 and 2
E) 2 and 3

Question

The diagram below shows supply, demand, and quantity exchanged of Monday matinee movie tickets. Assume it is a perfectly competitive market.  FIGURE 12- 4
-Refer to Figure 12- 4. If a disequilibrium price of $7.50 per movie ticket were imposed on this market, this market would not be allocatively efficient because
1) the sum of consumer and producer surplus would not be maximized;
2) the marginal benefit to consumers of the last movie consumed would be greater than the marginal cost to the seller;
3) the marginal cost to the seller of the last movie consumed would be more than the marginal benefit to consumers.
A) 2 only 
B) 1 only 
C) 3 only 
D) 1 and 2 
E) 2 and 3

Quizplus · Accepted Answer

A disequilibrium price of $7.50 would lead to a situation where the sum of consumer and producer surplus is not maximized (1), and the marginal benefit to consumers of the last movie consumed would be greater than the marginal cost to the seller (2), indicating inefficiency.

The Diagram Below Shows Supply, Demand, and Quantity Exchanged of Monday