Figure 9-1

Figure 9-1 shows the U.S. demand and supply for leather footwear.
-Refer to Figure 9-1.Under autarky,the consumer surplus is ________ and the producer surplus is ________.

Question

Figure 9-1
  
Figure 9-1 shows the U.S. demand and supply for leather footwear.
-Refer to Figure 9-1.Under autarky,the consumer surplus is ________ and the producer surplus is ________.

Quizplus · Accepted Answer

Under autarky, the consumer surplus is $195 and the producer surplus is $105. This is because the equilibrium price is $200, which is the price at which the quantity supplied equals the quantity demanded. At this price, consumers are willing to pay $300 for the good, but they only have to pay $200. This difference of $100 is the consumer surplus. Producers are willing to sell the good for $100, but they receive $200. This difference of $100 is the producer surplus.

Figure 9-1 Figure 9-1 Shows the U.S. Demand and Supply for Leather