Figure 7-6

-Refer to Figure 7-6.What is the consumer surplus if the price is $100?
A) $2,500
B) $5,000
C) $10,000
D) $20,000

Question

Figure 7-6
 
-Refer to Figure 7-6.What is the consumer surplus if the price is $100?
A) $2,500 
B) $5,000 
C) $10,000 
D) $20,000

Quizplus · Accepted Answer

Consumer surplus is the difference between the maximum price a consumer is willing to pay for a product and the actual price they end up paying. In this case, the maximum price a consumer is willing to pay is $150, which is the point where the demand curve intersects with the price axis. If the price is $100, then the consumer surplus is:
Consumer Surplus = Maximum Price - Actual Price
= $150 - $100
= $50
Total consumer surplus is the area of the triangle formed by the demand curve, the actual price, and the vertical axis. Using the formula for the area of a triangle, we get:
Consumer Surplus = (1/2) x 100 x 50
= $2,500.

Figure 7-6 -Refer to Figure 7-6.What Is the Consumer Surplus If the Consumer