Table 3.5
-Refer to Table 3.5.The equations above describe the demand and supply for Aunt Maud's Premium Hand Lotion.The equilibrium price and quantity for Aunt Maud's lotion are $20 and 30 thousand units.What is the value of economic surplus in this market?
A)$600 thousand
B)$1,050 thousand
C)$1,500 thousand
D)$2,100 thousand

Question

Table 3.5 
-Refer to Table 3.5.The equations above describe the demand and supply for Aunt Maud's Premium Hand Lotion.The equilibrium price and quantity for Aunt Maud's lotion are $20 and 30 thousand units.What is the value of economic surplus in this market?
A)$600 thousand 
B)$1,050 thousand 
C)$1,500 thousand 
D)$2,100 thousand

Quizplus · Accepted Answer

The economic surplus is the area above the supply curve and below the demand curve. In this case, the economic surplus is the area of the triangle with a base of 30 thousand units and a height of $10. The area of a triangle is (1/2) * base * height, so the economic surplus is (1/2) * 30,000 * 10 = $150,000.

Table 3.5 -Refer to Table 3.5.The Equations Above Describe the Demand and the Demand