Figure 7C

-Refer to Figure 7C. Assume that the farm product is grapes for wine-making. Also assume that the market for grapes is defined by the demand curve, D, and the supply curve, S1. Which of the following areas represents consumer surplus for this market?
A) Triangle pmcp1.
B) Triangle pmbp0.
C) Area P1BCP0.
D) None of these areas.

Question

Figure 7C
 
-Refer to Figure 7C. Assume that the farm product is grapes for wine-making. Also assume that the market for grapes is defined by the demand curve, D, and the supply curve, S1. Which of the following areas represents consumer surplus for this market?
A) Triangle pmcp1. 
B) Triangle pmbp0. 
C) Area P1BCP0. 
D) None of these areas.

Quizplus · Accepted Answer

Consumer surplus is the area above the price level and below the demand curve, up to the quantity traded. In this case, it is represented by the triangle pmcp1.

Figure 7C -Refer to Figure 7C. Assume That the Farm Product Is