Question
Asked Oct 16, 2019

Can you help me with the question below?

Refer to Figure 1 for questions 6-11 In Figure 1, S = Market Supply Curve; D = Market Demand Curve. What is consumer surplus at the competitive market equilibrium price and quantity?
A) $50
B) $40
C) $25
D) $16
E) $8

Figure 1:
Price/Gallon
The Market for Gasoline
$17
$16
$15
$14
$13
$12
$11
S
$10
$9
$8
$7
$6
$5
$4
$3
D.
$2
$1
$0
0
1
2
6
7
8
Gallons
n
en
help_outline

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Figure 1: Price/Gallon The Market for Gasoline $17 $16 $15 $14 $13 $12 $11 S $10 $9 $8 $7 $6 $5 $4 $3 D. $2 $1 $0 0 1 2 6 7 8 Gallons n en

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Expert Answer

Step 1

The consumer surplus is the difference between consumer’s maximum willing to pay and market price of the good.

Step 2

 Calculation of the consume...

x(Equilibrium quantity)x
(Maximum willing to pay- Equilibrium price)
Consumer surplus =2
극x(5)x(16-6)
(5x
=Ex50
-25
help_outline

Image Transcriptionclose

x(Equilibrium quantity)x (Maximum willing to pay- Equilibrium price) Consumer surplus =2 극x(5)x(16-6) (5x =Ex50 -25

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Business

Economics

Consumer demand theory

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