Assume the market depicted in the graph is in equilibrium. Which of the following statements is true?
A) Consumer surplus is greater than producer surplus.
B) Producer surplus is greater than consumer surplus.
C) Consumer surplus is the same as producer surplus.
D) Total surplus is smaller than producer surplus.

Question

Assume the market depicted in the graph is in equilibrium. Which of the following statements is true?
A) Consumer surplus is greater than producer surplus. 
B) Producer surplus is greater than consumer surplus. 
C) Consumer surplus is the same as producer surplus. 
D) Total surplus is smaller than producer surplus.

Quizplus · Accepted Answer

In equilibrium, the area above the market price and below the demand curve represents consumer surplus, while the area below the market price and above the supply curve represents producer surplus. Since the two areas are equal in the given graph, consumer surplus is the same as producer surplus. Therefore, choice C is the correct answer. Choices A, B, and D are incorrect as they do not accurately reflect the situation depicted in the graph.

Assume the Market Depicted in the Graph Is in Equilibrium