Exhibit 4A-1

-Refer to the exhibit.At the equilibrium price, what would consumer surplus be?
A) $480
B) $640
C) $1120
D) $1280

Question

Exhibit 4A-1
 
-Refer to the exhibit.At the equilibrium price, what would consumer surplus be?  
A) $480 
B) $640 
C) $1120 
D) $1280

Quizplus · Accepted Answer

Consumer surplus is the area above the price level and below the demand curve, up to the quantity traded. At the equilibrium price, the consumer surplus is represented by the triangle with a base of 40 units (the quantity) and a height of $24 (the difference between the highest price a consumer is willing to pay and the equilibrium price). The area of this triangle is 1/2 * base * height = 1/2 * 40 * 24 = $480.

Exhibit 4A-1 -Refer to the Exhibit.At the Equilibrium Price, What Would Consumer