Suppose the demand and supply curves for good X are both linear.The demand price for the first unit of X is $28,and the supply price for the first unit of X is $6.If the equilibrium price for good X is $16 and the equilibrium quantity of X is 24,000 units,then total consumer surplus is $________,total producer surplus is $_________,and total social surplus is $_____________.

Question

Quizplus · Accepted Answer

Consumer surplus is the area of the triangle above the equilibrium price and below the demand curve. It can be calculated as 1/2 * base * height = 1/2 * 24,000 * ($28 - $16) = $144,000. Producer surplus is the area below the equilibrium price and above the supply curve, calculated as 1/2 * 24,000 * ($16 - $6) = $120,000. Total social surplus is the sum of consumer and producer surplus, $144,000 + $120,000 = $264,000.

Suppose the Demand and Supply Curves for Good X Are