(Figure: The Market for Sandwiches)Look at the figure The Market for Sandwiches.At the competitive price of $5,10 sandwiches are sold.At this competitive price,consumer surplus equals _____ and producer surplus equals _____.

Question

Quizplus · Accepted Answer

At a price of $5, the demand curve intersects the supply curve at a quantity of 10 sandwiches. 
- Consumer surplus = area above the price and below the demand curve = $(10-5)*(½)*10 = $25 
- Producer surplus = area below the price and above the supply curve = $(5-1)*(½)*10 = $20 
Therefore, at a price of $5, total surplus equals $45. 
At a price of $10, there will be no transactions because the quantity demanded is 0. Therefore, the only competitive price is $5 and total surplus equals consumer surplus plus producer surplus, which is $25 + $20 = $45. Answer C is the only option that matches this result.

(Figure: the Market for Sandwiches)Look at the Figure the Market