6.3 Controlling Prices-Maximum and Minimum Prices

Figure 6.6
-Refer to Figure 6.6.Suppose that the equilibrium quantity is 100.Consumer surplus is equal to

Question

6.3 Controlling Prices-Maximum and Minimum Prices
  
Figure 6.6
-Refer to Figure 6.6.Suppose that the equilibrium quantity is 100.Consumer surplus is equal to

Quizplus · Accepted Answer

Consumer surplus is the area between the demand curve and the equilibrium price. In this case, the demand curve intercepts the y-axis at $200, therefore the equilibrium price is also $200. At a quantity of 100, the total consumer surplus is equal to the area of a triangle with base of 100 and height of $200, which is 1/2*(100)*($200) = $10,000.