Which area is total surplus in a market
A)the total area under the demand curve and above the price
B)the total area above the supply curve and up to the equilibrium price
C)the total area under price and up to the point of equilibrium
D)the total area between the demand and supply curves up to the point of equilibrium

Question

Quizplus · Accepted Answer

Total surplus is the difference between the total value that consumers place on a product or service (measured by their willingness to pay) and the total cost of producing it. This surplus can be calculated as the total area between the demand and supply curves up to the point of equilibrium, because this represents the total value to consumers and the total cost to producers. The other options are incorrect because they do not capture all areas of surplus in the market.

Which Area Is Total Surplus in a Market