If 10 000 snow tires are produced and purchased in the month of November, we can say that economic surplus is
A) the number of snow tires that are produced in excess of the equilibrium quantity.
B) the net value that society as a whole receives by producing and consuming those 10 000 snow tires.
C) the net value to those consumers who purchased the 10 000 snow tires.
D) the profit earned by the producers of those 10 000 snow tires.
E) the price at which the tires are sold multiplied by 10 000.

Question

Quizplus · Accepted Answer

The economic surplus is the net value that society as a whole receives by producing and consuming those 10,000 snow tires. It takes into account both the consumer surplus (the difference between what consumers are willing to pay for the tires and what they actually pay) and the producer surplus (the difference between the price producers receive for the tires and the cost of producing them).

If 10 000 Snow Tires Are Produced and Purchased in the Month