What would be the situation if the price was moved from p3 to p2? a) the price would be lowered b) the price would be too high c) there would be no supply of widgets left over

The answer is C. There would be no supply of widgets leftover.

Where the supply and demand line meet on P2 is called the equilibrium. This is because the amount of supplies that are given and the amount of goods demanded are equal. And when supply and demand are at an equilibrium, there isn't be a shortage (when demand > supply) nor a surplus (when supply > demand).

trade regulation is a field of law, often bracketed with antitrust (as in the phrase “antitrust and trade regulation law”), including government regulation of unfair methods of competition and unfair or deceptive business acts or practices. antitrust law is often considered a subset of trade regulation law. franchise and distribution law, consumer protection law, and advertising law are sometimes considered parts of trade regulation law.

in general the theory of economics says that the more open to trade a country is the better   the result for the same country and the whole economies.

in real life countries impose taxes, quotas, etc which is not so good for the economies.

this kind of commercial war between the usa and china is slowing down the growth of the whole world so we can say that it is a draw back of trade regulations. and the free trade agreements are benefits of trade regulations.