Total surplus is represented by the area
A)under the demand curve and above the price.
B)above the supply curve and up to the price.
C)under the supply curve and up to the price.
D)between the demand and supply curves up to the point of equilibrium.

Question

Quizplus · Accepted Answer

Total surplus is the combined consumer surplus and producer surplus in a market. Consumer surplus is the difference between the price a consumer is willing to pay for a good or service and the price they actually pay. Producer surplus is the difference between the price a producer is willing to sell a good or service for and the price they actually receive. In a market with equilibrium price and quantity, total surplus is maximized and represented by the area between the demand and supply curves up to the point of equilibrium. Therefore, the correct choice is D.

Total Surplus Is Represented by the Area