(Figure: Understanding Surplus and Efficiency) In the graph, what is consumer surplus when the market price is $10?

Question

Quizplus · Accepted Answer

Consumer surplus is the area above the market price and below the demand curve. At a market price of $10, the consumer surplus is the triangle formed by the points (0, $40), (0, $10), and (6, $10). Using the formula for the area of a triangle (1/2 x base x height), we can calculate the consumer surplus to be:
1/2 x (6-0) x ($40-$10) = $20. Therefore, the answer is D.

(Figure: Understanding Surplus and Efficiency) in the Graph, What Is