Figure 9-17
-Refer to Figure 9-17.With free trade,consumer surplus is
A)$400 and producer surplus is $200.
B)$400 and producer surplus is $800.
C)$1,600 and producer surplus is $200.
D)$1,600 and producer surplus is $800.

Question

Figure 9-17 
-Refer to Figure 9-17.With free trade,consumer surplus is
A)$400 and producer surplus is $200. 
B)$400 and producer surplus is $800. 
C)$1,600 and producer surplus is $200. 
D)$1,600 and producer surplus is $800.

Quizplus · Accepted Answer

Consumer surplus is the area above the price line and below the demand curve, which is $(40-20)	imes(50-30)/2 = $400. Producer surplus is the area below the price line and above the supply curve, which is $(40-20)	imes(10-0)/2 + (50-40)	imes(10-0) = $1,600. Therefore, the correct answer is C.

Figure 9-17 -Refer to Figure 9-17.With Free Trade,consumer Surplus Is