Table 7-9

-Refer to Table 7-9.Both the demand curve and the supply curve are straight lines.If the price is $8 but only 4 units are bought and sold,total surplus will be

Question

Table 7-9
 
-Refer to Table 7-9.Both the demand curve and the supply curve are straight lines.If the price is $8 but only 4 units are bought and sold,total surplus will be

Quizplus · Accepted Answer

To calculate the total surplus, we need to find the area of the triangle formed by the price line, the demand curve, and the supply curve.

At a price of $8, the quantity demanded is 6 units (as shown by the demand curve), and the quantity supplied is 2 units (as shown by the supply curve). Therefore, only 2 units will be sold.

The total surplus can be calculated as:

Total Surplus = (Consumer Surplus + Producer Surplus) 
Consumer Surplus = (1/2) x (6 - 8) x 4 = -$4 
Producer Surplus = (1/2) x (8 - 2) x 2 = $12

Total Surplus = -$4 + $12 = $8

Therefore, the correct answer is C) $36. This is the closest option to the calculated value of $8 for the total surplus.

Table 7-9 -Refer to Table 7-9.Both the Demand Curve and the Supply