Figure 7-20

-Refer to Figure 7-20.If 6 units of the good are produced and sold,then
A) consumer surplus is maximized.
B) producer surplus is maximized.
C) the sum of consumer surplus and producer surplus is maximized.
D) the marginal value to buyers exceeds the marginal cost to sellers.

Question

Figure 7-20
 
-Refer to Figure 7-20.If 6 units of the good are produced and sold,then
A) consumer surplus is maximized. 
B) producer surplus is maximized. 
C) the sum of consumer surplus and producer surplus is maximized. 
D) the marginal value to buyers exceeds the marginal cost to sellers.

Quizplus · Accepted Answer

The sum of consumer surplus and producer surplus is maximized when the quantity produced and sold is at the equilibrium level, where the demand and supply curves intersect. If 6 units represent this equilibrium quantity, then the total surplus is maximized.

Figure 7-20 -Refer to Figure 7-20.If 6 Units of the Good Are