Figure 7-24
-Refer to Figure 7-24.If 6 units of the good are produced and sold,then
A)consumer surplus is greater than producer surplus.
B)producer surplus is maximized.
C)the sum of consumer surplus and producer surplus is maximized.
D)consumer surplus equals producer surplus.

Question

Figure 7-24 
-Refer to Figure 7-24.If 6 units of the good are produced and sold,then
A)consumer surplus is greater than producer surplus. 
B)producer surplus is maximized. 
C)the sum of consumer surplus and producer surplus is maximized. 
D)consumer surplus equals producer surplus.

Quizplus · Accepted Answer

At a quantity of 6, the intersection of the demand and supply curves determines the market price. The area above the market price and below the demand curve represents consumer surplus, while the area below the market price and above the supply curve represents producer surplus. At a quantity of 6, the sum of consumer and producer surpluses is maximized. Therefore, the correct choice is C.

Figure 7-24 -Refer to Figure 7-24.If 6 Units of the Good Are