Figure 7-22
-Refer to Figure 7-22.At the equilibrium price,total surplus is
A)$2,500.
B)$1,000.
C)$3,500.
D)$7,000.

Question

Figure 7-22 
-Refer to Figure 7-22.At the equilibrium price,total surplus is
A)$2,500. 
B)$1,000. 
C)$3,500. 
D)$7,000.

Quizplus · Accepted Answer

At the equilibrium price, consumer surplus is the area above the equilibrium price and below the demand curve (triangle ABE) which is $4,000. Producer surplus is the area below the equilibrium price and above the supply curve (triangle CDE) which is $1,500. Thus, total surplus is $4,000 + $1,500 = $5,500. Therefore, the correct option is C, $3,500, which is not the total surplus at equilibrium.

Figure 7-22 -Refer to Figure 7-22.At the Equilibrium Price,total Surplus Is