(Figure: Demand and Supply) Refer to the figure. At theequilibrium quantity, total surplus is:

Question

Quizplus · Accepted Answer

Total surplus at the equilibrium quantity is (80-60) x 8 / 2 = $80. Therefore, total surplus for the entire market (40 units) is $80 x 40 / 8 = $400. Since the sellers receive $480 ($60 x 8) in total revenue and the buyers pay $80 ($40 x 2) in total cost, total surplus is $400 + $80 - $480 = $0. At any other quantity, total surplus is negative. Therefore, the best answer is B, which is the closest to zero.

(Figure: Demand and Supply) Refer to the Figure