Refer to the graph shown. An effective price ceiling at Pc causes consumer surplus to:
A. fall from areas C + D + F to area D.
B. fall from areas A + B + E to area A.
C. change from areas A + B + E to areas A + B + C.
D. change from areas C + D + F to areas B + C + D.
Answer: C
You might also like to view...
The major difference between monopolistic competition and monopoly is
A) monopoly is a price setter and a firm in monopolistic competition is a price taker. B) only a monopoly can earn an economic profit in the long run. C) only a firm in monopolistic competition can earn an economic profit in the short run. D) how the quantity of output is determined. E) only firms in monopolistic competition are protected by barriers to entry.
People specialize in activities in which they have a comparative advantage
A) if they know they are more productive than anyone else in the particular activity. B) only if they understand the logic of comparative advantage. C) when they expect to obtain more of whatever they want by doing so. D) only when all of the above are true.