According to the graph shown, if the market goes from equilibrium to having its price set at $10:
A) total surplus will fall by $30.
B) producer surplus will rise by $45.
C) total surplus will change by $15.
D) consumer surplus will fall by $30.

Question

According to the graph shown, if the market goes from equilibrium to having its price set at $10:
A) total surplus will fall by $30. 
B) producer surplus will rise by $45. 
C) total surplus will change by $15. 
D) consumer surplus will fall by $30.

Quizplus · Accepted Answer

If the price is set at $10, the quantity demanded will decrease to 5 and the quantity supplied will increase to 5. At this price, consumer surplus will decrease by $30 (the difference between the original consumer surplus and the area under the demand curve above the price of $10). Meanwhile, producer surplus will increase by $15 (the difference between the original producer surplus and the area under the supply curve below the price of $10). Therefore, total surplus will decrease by $15 ($30 decrease in consumer surplus minus $15 increase in producer surplus).

According to the Graph Shown, If the Market Goes from Equilibrium