Figure: Demand 2 In the figure where S₁ is the supply of drugs with no prohibition and S₂ is the supply of drugs with prohibition, the area that represents total revenue with drug prohibition is ______, and the area that represents total revenue with no prohibition is ______. A) A + C + D; B + D B) C + D; A + C C) A + C; C + D D) B + D; A + C

Question

Quizplus · Accepted Answer

The total revenue with drug prohibition would be the area below the demand curve (D) and above the supply curve with prohibition (S₂), which is represented by area C. On the other hand, the total revenue with no prohibition would be the area below the demand curve (D) and above the supply curve with no prohibition (S₁), which is represented by the sum of areas A, C, and D. Therefore, the area that represents total revenue with no prohibition is A + C + D.

Figure: Demand 2 in the Figure Where S1 Is

Figure: Demand 2 in the Figure Where S₁ Is