Figure 10-1
This figure reflects the market for outdoor concerts in a public park surrounded by residential neighbourhoods.

-Refer to Figure 10-1.What is the total surplus derived from the most efficient outcome

Question

Figure 10-1
This figure reflects the market for outdoor concerts in a public park surrounded by residential neighbourhoods.
 
-Refer to Figure 10-1.What is the total surplus derived from the most efficient outcome

Quizplus · Accepted Answer

The total surplus is the sum of the consumer surplus and the producer surplus. The consumer surplus is the difference between the price consumers are willing to pay for a good and the price they actually pay. The producer surplus is the difference between the price producers receive for a good and the price they are willing to accept. In Figure 10-1, the consumer surplus is represented by the area a + b, and the producer surplus is represented by the area c + d. Therefore, the total surplus is a + b + c + d.

Figure 10-1 This Figure Reflects the Market for Outdoor Concerts in a in a Public