According to the graph shown, if the market goes from equilibrium to having its price set at $10:
A) deadweight loss will occur.
B) seven fewer units will be exchanged.
C) consumer surplus will decrease.
D) All of these are correct.

Question

According to the graph shown, if the market goes from equilibrium to having its price set at $10:
A) deadweight loss will occur. 
B) seven fewer units will be exchanged. 
C) consumer surplus will decrease. 
D) All of these are correct.

Quizplus · Accepted Answer

When the market price changes from equilibrium to $10, there will be excess supply and therefore deadweight loss will occur. Also, at the new price of $10, seven fewer units will be exchanged than at the original equilibrium point, leading to a decrease in consumer surplus. Therefore, all of the choices are correct.

According to the Graph Shown, If the Market Goes from Equilibrium