Graph 9-7
-According to Graph 9-7, consumer surplus before trade would be:
A)$20 000
B)$24 000
C)$40 000
D)$48 000

Question

Graph 9-7 
-According to Graph 9-7, consumer surplus before trade would be:
A)$20 000 
B)$24 000 
C)$40 000 
D)$48 000

Quizplus · Accepted Answer

Consumer surplus before trade is the area below the demand curve and above the equilibrium price, up to the quantity traded. From the graph, we can see that the equilibrium price is $6 and the quantity traded is 4, so the consumer surplus before trade would be the triangle formed by points A (0,10), B (4,6), and C (0,6). The area of this triangle is (1/2)(4)(10-6) = $8,000. Since there are 3 consumers represented in the graph, the total consumer surplus before trade would be 3 times this amount, or $24,000. Therefore, the correct answer is B.

Graph 9-7 -According to Graph 9-7, Consumer Surplus Before Trade Would Be