To calculate consumer surplus for the case when a quota is in place:
A) integrate the area under the demand curve and above the free-market equilibrium price.
B) integrate the area under the demand curve and above the price determined by the market after the quota is in place.
C) integrate the area above the supply curve and under the price determined by the market after the quota is in place.
D) integrate the area under the demand curve and above the supply curve between zero and the quota quantity.

Question

Quizplus · Accepted Answer

Consumer surplus is calculated by integrating the area under the demand curve and above the price determined by the market after the quota is in place. This reflects the difference between what consumers are willing to pay and what they actually pay after the quota restricts supply.

To Calculate Consumer Surplus for the Case When a Quota