Consider a perfectly competitive market with market supply and market demand What is total surplus in this market?

Question

Consider a perfectly competitive market with market supply  and market demand  What is total surplus in this market?

Quizplus · Accepted Answer

To find total surplus, we need to find the area between the demand and supply curve up to the equilibrium quantity. The equilibrium quantity in this case is 8. The equilibrium price can be found by looking at either the supply or demand curve at that quantity, which is $14. 
Total surplus = (1/2)*(14-10)*8 = 16*4 = 64 
Consumer surplus = (1/2)*(14-20)*8 = -24 
Producer surplus = (1/2)*(20-14)*8 = 24 
Total surplus = 64 + (-24) + 24 = 64 
Therefore, the best choice is (C) 196, which is the closest option to 64.

Consider a Perfectly Competitive Market with Market Supply and Market