(Figure: Market for Engines) If there is no international trade in this market, the value of the consumer surplus is:

Question

(Figure: Market for Engines) If there is no international trade in this market, the value of the consumer surplus is:
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Quizplus · Accepted Answer

The consumer surplus is the difference between what consumers are willing to pay and what they actually pay, summed across all consumers. In this case, the demand curve shows that consumers are willing to pay up to $9,000 for an engine, but the equilibrium price is $6,000. Therefore, the consumer surplus for each engine sold is $3,000. The market demand is 240 engines, so the total consumer surplus is 240 x $3,000 = $720,000.

(Figure: Market for Engines) If There Is No International Trade