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-(Figure: Domestic Market for Digital Cameras) Use Figure: The Domestic Market for Digital Cameras.Assume that P_A is the autarky price and P_W is the world price.Total surplus before international trade is equal to the area:

Question

Use the following to answer question:

-(Figure: Domestic Market for Digital Cameras) Use Figure: The Domestic Market for Digital Cameras.Assume that P_A is the autarky price and P_W is the world price.Total surplus before international trade is equal to the area:

Quizplus · Accepted Answer

Total surplus in a market is the sum of consumer surplus and producer surplus. Before international trade (at autarky price), the total surplus includes the consumer surplus (area above the price and below the demand curve) and the producer surplus (area below the price and above the supply curve). In this case, it includes areas A (consumer surplus), B (producer surplus), and C (also part of the producer surplus).

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