The following figure shows the demand curve, D, and supply curve, S, of ballpoint pens in Lithasia. The world price of pens is $2.

-Refer to the figure above.What is the total surplus before Lithasia opens up to free trade?

Question

The following figure shows the demand curve, D, and supply curve, S, of ballpoint pens in Lithasia. The world price of pens is $2.
 
-Refer to the figure above.What is the total surplus before Lithasia opens up to free trade?

Quizplus · Accepted Answer

The total surplus before opening up to free trade is the sum of consumer surplus and producer surplus. Consumer surplus is the area above the price level and below the demand curve, while producer surplus is the area below the price level and above the supply curve. Without the figure, it's impossible to calculate the exact areas, but based on the given options, if C is the correct answer, it implies that the total surplus (consumer surplus plus producer surplus) before opening up to free trade is $30.

The Following Figure Shows the Demand Curve, D, and Supply