Top Posters
Since Sunday
Home Q & A Board Other Fields Homework Help Business Economics
New Topic  
greyfrost greyfrost
wrote...
Go to Answer
Posts: 136
Rep: 0 0
A year ago

The diagram below shows the demand and supply curves in a perfectly competitive market.

Short description: A graph plots quantity against price. Long description: The horizontal axis represents quantity. The vertical axis represents the price. The graph plots a horizontal line and two curves. The horizontal line representing competitive market price is drawn from P subscript 2 on the vertical axis. A decreasing curve representing demand equals MB passes through the points, (0, P subscript 3), (Q subscript 1, above P subscript 2), (Q subscript 2, P subscript 2), and (Q subscript 3, below P subscript 1). An increasing curve representing supply equals MC passes through the points, (0, P subscript 1), (Q subscript 1, above P subscript 1), (Q subscript 2, P subscript 2), and (Q subscript 3, below P subscript 3). The two lines intersect at E (Q subscript 2, P subscript 2). Three vertical dashed lines are extended from Q subscript 1, Q subscript 2, and Q subscript 3. The region below the demand curve, to the right of Q subscript 1, and above the horizontal line is numbered 1. The region above the supply curve, to the right of Q subscript 1, and below the horizontal line is numbered 2. The region below the supply curve, to the left of Q subscript 3, and above the horizontal line is numbered 3. The region above the demand curve, to the left of Q subscript 3, and below the horizontal line is numbered 4.

FIGURE 12-6

Refer to Figure 12-6. Allocative efficiency in this industry occurs



▸ at price P1 and output Q3.

▸ at output level Q3.

▸ at output level Q1.

▸ where the areas 1, 2, 3, and 4 are maximized.

▸ at price P2 and output Q2.
Textbook 
Microeconomics

Microeconomics


Edition: 17th
Author:
Read 21 times
1 Reply
Replies
Answer verified by a subject expert
ndedrickndedrick
wrote...
#1
Posts: 132
Rep: 0 0
A year ago
Sign in or Sign up in seconds to unlock everything for free
More solutions for this book are available here
1

Related Topics

greyfrost Author
wrote...

A year ago
You make an excellent tutor!
vanna2014
wrote...

Yesterday
Smart ... Thanks!
jbag1237
wrote...

2 hours ago
Thank you, thank you, thank you!
New Topic      
Quick Reply
Explore
Post your homework questions and get free online help from our incredible volunteers
  1253 People Browsing
Start New Topic Take the Tour CoursesNew Study Tools Topics Trending Browse by Textbook
Related Images
  
 767
  
 259
  
 53
Your Opinion
What percentage of nature vs. nurture dictates human intelligence?
Votes: 431
Previous poll results: How often do you eat-out per week?