Assume the market depicted in the graph is in equilibrium. What is total surplus?
A) $150
B) $175
C) $200
D) $400

Question

Assume the market depicted in the graph is in equilibrium. What is total surplus?
A) $150 
B) $175 
C) $200 
D) $400

Quizplus · Accepted Answer

Total surplus is the sum of consumer surplus and producer surplus. Consumer surplus is the area below the demand curve and above the equilibrium price, while producer surplus is the area above the supply curve and below the equilibrium price. 
In this case, consumer surplus is (0.5 x 10 x 10) = $50, while producer surplus is (0.5 x 10 x 20) = $100. 
Therefore, total surplus is $50 + $100 = $150. 
The correct answer choice is C, which matches the calculated total surplus.

Assume the Market Depicted in the Graph Is in Equilibrium