8. Total economic surplus The following diagram shows supply and demand in the market for smartphones. Use the black point (plus symbol) to indicate the equilibrium price and quantity of smartphones Then use the green point (triangle symbol) to fill the area representing consumer surplus, and use the purple point (diamond symbol) to fill the area representing producer surplus. Your Answer Correct Answer 150 Demand 135 Equilibrium 105 A Consumer Surplus O Producer Surplus 15 Supply 30 100 150 200 250 300 350 400 450 500 QUANTITY (Millions of phones) Points: 1/1 Close Explanation Explanation: The market equilibrium price and quantity are determined by the intersection of the demand and supply curves. In this case, this occurs at a price of $ 75 per phone and a quantity of 200 million phones. Consumer surplus is the difference between a buyer's willingness to pay (what the item is worth to the buyer) and the price the buyer actually pays. Consumer surplus for the entire market is the triangular area below the demand curve, above the market price of $ 75 per phone, and to the left of the market quantity of 200 million phones. Producer surplus is the difference between the price a seller actually receives for an item and the lowest price at which the seller would be willing to provide the item (the additional cost to the seller of providing another unit of the item). Producer surplus for the entire market is the triangular area above the supply curve, below the market price of $75 per phone, and to the left of the market quantity of 200 million phones. Total surplus in this market is $12,000