Figure 7-6
-Refer to Figure 7-6.At the equilibrium price,consumer surplus is
A)$1,600.
B)$800.
C)$1,400.
D)$700.

Question

Figure 7-6 
-Refer to Figure 7-6.At the equilibrium price,consumer surplus is
A)$1,600. 
B)$800. 
C)$1,400. 
D)$700.

Quizplus · Accepted Answer

At the equilibrium price of $40, the quantity demanded is 120 units and the quantity supplied is also 120 units. The area under the demand curve and above the price line gives us consumer surplus, which is given by the triangle with base 80 (120-40) and height 10 (50-40), multiplied by 0.5. Therefore, consumer surplus = (80*10*0.5) = $400. Since there are two consumers participating in the market, total consumer surplus is $400*2 = $800. Therefore, the correct answer is B.

Figure 7-6 -Refer to Figure 7-6.At the Equilibrium Price,consumer Surplus Is