The following table displays the reservation values of buyers and sellers in the market for notebooks, where each individual either wants to buy or sell one notebook.

-Refer to the table above.When the price is ________ and the quantity is ________,social surplus is maximized.
A) $8; 5 units
B) $6; 4 units
C) $4; 4 units
D) $2; 8 units

Question

The following table displays the reservation values of buyers and sellers in the market for notebooks, where each individual either wants to buy or sell one notebook.
 
-Refer to the table above.When the price is ________ and the quantity is ________,social surplus is maximized.
A) $8; 5 units 
B) $6; 4 units 
C) $4; 4 units 
D) $2; 8 units

Quizplus · Accepted Answer

Social surplus is maximized where the sum of consumer surplus and producer surplus is at its highest. This typically occurs where the supply and demand curves intersect, indicating an equilibrium price and quantity. Without seeing the specific table, a general principle in economics is that equilibrium maximizes social surplus, which suggests the choice where price and quantity are balanced. Among the given options, C) $4; 4 units suggests a balanced scenario that could represent such an equilibrium, assuming a standard demand and supply scenario.

The Following Table Displays the Reservation Values of Buyers and Sellers