Figure 7-24
-Refer to Figure 7-24.At equilibrium,total surplus is measured by the area
A)ABD.
B)ABF.
C)FBD.
D)HGCI.

Question

Figure 7-24 
-Refer to Figure 7-24.At equilibrium,total surplus is measured by the area
A)ABD. 
B)ABF. 
C)FBD. 
D)HGCI.

Quizplus · Accepted Answer

Total surplus is the sum of consumer surplus and producer surplus. Consumer surplus is the area below the demand curve and above the equilibrium price. Producer surplus is the area above the supply curve and below the equilibrium price. In Figure 7-24, the equilibrium price is P* and the equilibrium quantity is Q*. The consumer surplus is the area ABF and the producer surplus is the area FBD. Therefore, the total surplus is the area ABD.

Figure 7-24 -Refer to Figure 7-24.At Equilibrium,total Surplus Is Measured by the Measured