-The figure above represents the competitive market for slices of key lime pie. When the price is $3, the total consumer surplus equals

Question

Quizplus · Accepted Answer

Consumer surplus is the area between the demand curve and the price level, up to the quantity sold. At a price of $3, the consumer surplus is calculated as the area of the triangle formed by the demand curve, the price line at $3, and the vertical axis. If the base of this triangle (quantity) is 20 slices and the height (difference between maximum willingness to pay and price) is $6, the consumer surplus is 0.5 * base * height = 0.5 * 20 * 6 = $60.

-The Figure Above Represents the Competitive Market for Slices of Key