The following figure illustrates the demand and supply of decorative light bulbs in a perfectly competitive market.

-Refer to the figure above.What is the consumer surplus in the market?

Question

The following figure illustrates the demand and supply of decorative light bulbs in a perfectly competitive market.
 
-Refer to the figure above.What is the consumer surplus in the market?

Quizplus · Accepted Answer

To find the consumer surplus, we need to identify the equilibrium price and quantity, which is where the demand and supply curves intersect at a price of $25 and a quantity of 10 units. The area of the triangle above the equilibrium price and below the demand curve represents the consumer surplus, which is (1/2) x ($25-$10) x 10 = $75. Therefore, the correct answer is (B).

The Following Figure Illustrates the Demand and Supply of Decorative