Figure 7-29
-Refer to Figure 7-29.Which of the following statements is correct?
A)The market is in equilibrium at Q1.
B)At Q2,the cost to sellers exceeds the value to buyers.
C)At Q4,the value to buyers is less than the cost to sellers.
D)At Q3,the market is producing too much output.

Question

Figure 7-29 
-Refer to Figure 7-29.Which of the following statements is correct?
A)The market is in equilibrium at Q1. 
B)At Q2,the cost to sellers exceeds the value to buyers. 
C)At Q4,the value to buyers is less than the cost to sellers. 
D)At Q3,the market is producing too much output.

Quizplus · Accepted Answer

At Q4, the value to buyers is less than the cost to sellers, indicating a situation of a deadweight loss, where the market is producing less than the socially optimal level of output. All other answer choices are incorrect.

Figure 7-29 -Refer to Figure 7-29.Which of the Following Statements Is Correct