Resource Supply/Demand

The following questions refer to the accompanying graph, which shows the supply and demand for a resource. The owner of the resource is receiving the price P 0 and is providing the quantity Q 0 .

-Refer to Resource Supply/Demand.The social gain from this resource being sold is
A) area A
B) area A + B
C) area A + B + C
D) area A + B + C + D

Question

Resource Supply/Demand

The following questions refer to the accompanying graph, which shows the supply and demand for a resource. The owner of the resource is receiving the price P 0 and is providing the quantity Q 0 .

-Refer to Resource Supply/Demand.The social gain from this resource being sold is
A) area A 
B) area A + B 
C) area A + B + C 
D) area A + B + C + D

Quizplus · Accepted Answer

The social gain from a resource being sold is represented by the total surplus, which includes both consumer surplus (area above the price and below the demand curve) and producer surplus (area below the price and above the supply curve). Therefore, it includes areas A (consumer surplus), B (producer surplus), and C (additional producer surplus not captured at the lower price), making the correct answer area A + B + C.

Resource Supply/Demand The Following Questions Refer to the Accompanying Graph, Which Shows