Table 4-6

-Refer to Table 4-6.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?

Question

Table 4-6
 
-Refer to Table 4-6.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?

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 a 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 4-6 -Refer to Table 4-6.The Equations Above Describe the Demand and Describe