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 Q₁, but the price was still at its free-market level, the loss in consumer surplus relative to the competitive equilibrium would be illustrated by area
A) P3P2E.
B) 1.
C) 2.
D) P1P3E.
E) 1 + 2.

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 Q₁, but the price was still at its free-market level, the loss in consumer surplus relative to the competitive equilibrium would be illustrated by area
A) P3P2E. 
B) 1. 
C) 2. 
D) P1P3E. 
E) 1 + 2.

Quizplus · Accepted Answer

The Answer of 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 Q₁, but the price was still at its free-market level, the loss in consumer surplus relative to the competitive equilibrium would be illustrated by area
A) P3P2E. 
B) 1. 
C) 2. 
D) P1P3E. 
E) 1 + 2.

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