The graph shows the market for wheat in an economy. The equilibrium price and quantity of wheat bought and sold in the domestic market in the absence of international trade are P₂ and Q₂, respectively. If the world price of wheat is P₃, the loss in consumer surplus is equal to area _____.Figure 18.1

Question

Quizplus · Accepted Answer

The loss in consumer surplus is equal to the area between the original demand curve and the new world price line, from the equilibrium quantity to the quantity demanded at the world price. This area is represented by B and C on the graph. Therefore, the answer is B.

The Graph Shows the Market for Wheat in an Economy