A line graph depicting the variation of price on vertical axis with quantity on horizontal axis.The horizontal axis lists Q1, Q2, and Q3 and the vertical axis lists P1. A decreasing line labeled upper D intersects an increasing line from the origin, labeled S, forming one triangle each, along both the vertical and horizontal axes. The point of intersection (Q2, P1) connects to both the axes with two dotted straight lines dividing both the triangles in two equal parts. A dotted line from a point at upper D to Q1 further divides the triangle along the vertical axis in four parts. In this triangle, from top left, the regions are labeled as a, b and from bottom left, the regions are labeled c and lower d. A dotted line from a point at S to Q3 forms a triangle to the right of the point of intersection. An extended dotted line from P1 through the point of intersection divides the triangle to the right, in two equal parts with the top region labeled e and the bottom region labeled f.
If actual production and consumption occur at Q2
Multiple Choice
economic surplus is maximized.
missing surplus of a + b + c + d occurs.
missing surplus of a + c occurs.
missing surplus of e + f occurs.
