-In the above figure, a price of $1.25 and a quantity of 5 million gallons of milk per day maximizes the
A) amount of consumer surplus.
B) amount of producer surplus.
C) sum of consumer surplus and producer surplus.
D) All of the above answers are correct.

Question

-In the above figure, a price of $1.25 and a quantity of 5 million gallons of milk per day maximizes the
A) amount of consumer surplus. 
B) amount of producer surplus. 
C) sum of consumer surplus and producer surplus. 
D) All of the above answers are correct.

Quizplus · Accepted Answer

The price and quantity that maximize the sum of consumer surplus and producer surplus are where the market is in equilibrium, ensuring maximum total welfare.

-In the Above Figure, a Price of $1