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Figure: The Domestic Supply and Demand for SUVs in the United States
-(Figure: The Domestic Supply and Demand for SUVs in the United States) Look at the figure The Domestic Supply and Demand for SUVs in the United States. Suppose the world price equals $50,000 and there is free trade. Calculate the loss of consumer surplus.

Question

Use the following to answer questions :
Figure: The Domestic Supply and Demand for SUVs in the United States 
-(Figure: The Domestic Supply and Demand for SUVs in the United States) Look at the figure The Domestic Supply and Demand for SUVs in the United States. Suppose the world price equals $50,000 and there is free trade. Calculate the loss of consumer surplus.

Quizplus · Accepted Answer

The loss of consumer surplus is calculated as the area between the domestic demand curve and the world price line, up to the quantity consumed domestically. The given figure and world price suggest that this area corresponds to $41,250 million.

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