Table 4-11

-Refer to Table 4-11. The equations above describe the demand and supply for Chef Ernie's Sushi-on-a-Stick. The equilibrium price and quantity for Chef Ernie's sushi are $60 and 20 thousand units. What is the value of economic surplus in this market?

Question

Table 4-11
 
-Refer to Table 4-11. The equations above describe the demand and supply for Chef Ernie's Sushi-on-a-Stick. The equilibrium price and quantity for Chef Ernie's sushi are $60 and 20 thousand units. What is the value of economic surplus in this market?

Quizplus · Accepted Answer

The economic surplus is the area above the supply curve and below the demand curve. In this case, the economic surplus is a triangle with a base of 20 thousand units and a height of $30. The area of a triangle is (1/2) * base * height, so the economic surplus is (1/2) * 20,000 * $30 = $300,000.

Table 4-11 -Refer to Table 4-11. the Equations Above Describe the Demand