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 true.

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 true.

Quizplus · Accepted Answer

If the market price increases from the equilibrium of $8 to $10, there will be a deadweight loss due to inefficient allocation of goods, seven fewer units will be exchanged due to the decrease in quantity demanded, and consumer surplus will decrease due to the increase in price. Therefore, all three statements are true.

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