Refer to Scenario 13.1. If your negotiated price had been $350 instead of $250, the sum of consumer surplus and producer surplus would be:
A) less than what would have accrued at the $250 price.
B) the same as what would have accrued at the $250 price.
C) more than what would have accrued at the $250 price.
D) None of the above is necessarily correct.

Question

Quizplus · Accepted Answer

The sum of consumer surplus and producer surplus is maximized at the equilibrium price. Changing the negotiated price to $350 from $250 does not change the total surplus, as it is determined by the equilibrium price and quantity, not the negotiated price.