3. Consumer surplus and producer surplus from market exchange

Consider the Venezuelan market for soybeans.

The following graph shows the domestic demand and domestic supply curves for soybeans in Venezuela. Suppose Venezuela's government currently does not allow the international trade in soybeans.

Use the black point (plus symbol) to indicate the equilibrium price of a ton of soybeans and the equilibrium quantity of soybeans in Venezuela in the absence of international trade. Then, use the green point (triangle symbol) to shade the area representing consumer surplus in equilibrium. Finally, use the purple point (diamond symbol) to shade the area representing producer surplus in equilibrium.

Note: Select and drag a fill area point from the palette to the graph. To fill in regions on the graph, merely drop the fill area point on the desired region.

No Trade EquilibriumConsumer SurplusProducer Surplus04080120160200240280320360400550525500475450425400375350325300PRICE (Dollars per ton)QUANTITY (Thousands of tons of soybeans)Domestic DemandDomestic SupplyArea: 12500

Based on the previous graph, total surplus in the absence of international trade is

million.