Question
Identify the Surpluses. The graph to the right shows a supply curve and a demand curve and several areas in between. Identify the areas on
Identify the Surpluses. The graph to the right shows a supply curve and a demand curve and several areas in between. Identify the areas on the figure that represent thefollowing:
a. Consumer surplus in the marketequilibrium:
AB
F
A
ABC
DEF
b. Producer surplus in the marketequilibrium:
ABC
AB
DF
DEF
F
c. Total surplus in the marketequilibrium:
ABC
DEF
ABDF
DEF
ABCDEF
d. Consumer surplus when the price is $5
5:
ABD
CE
DEF
F
ABC
e. Producer surplus when the price is $5
5:
CE
DE
F
DEF
ABD
f. Total surplus when the price is $5
5:
DEF
BDCE
ABD
ABC
ABDF
g. Consumer surplus when the quantity is 50
50:
A
DEF
CE
F
ABD
h. Producer surplus when the quantity is 50
50:
F
DEF
ABC
CE
BDF
i. Total surplus when the quantity is 50
50:
ABDF
CE
BDCE
ABCDEF
Consumer and producer surplus
0
20
40
60
80
100
120
140
160
180
0
2
4
6
8
10
12
14
16
18
20
22
24
26
28
30
Quantity
Price
Supply
Demand
A
B
D
F
C
E
5
20
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Financial Reporting And Analysis
Authors: Lawrence Revsine, Daniel Collins
5th Edition
0078110866, 978-0078110863
