Figure: Consumer Surplus Refer to the figure. Calculate the dollar amount of consumer surplus being earned in this market when the price is $30 and there are 300 units consumed.
A) $4,500
B) $9,000
C) $18,000
D) $450

Question

Figure: Consumer Surplus  Refer to the figure. Calculate the dollar amount of consumer surplus being earned in this market when the price is $30 and there are 300 units consumed.
A) $4,500 
B) $9,000 
C) $18,000 
D) $450

Quizplus · Accepted Answer

The consumer surplus at a price of $30 and 300 units consumed is the area above the price line and below the demand curve up to 300 units. This area can be calculated as a triangle with base 300 and height (100-30) = 70. Therefore, the consumer surplus is (1/2) x 300 x 70 = $10,500. However, the shaded area in the figure represents both consumer surplus and producer surplus. Since we are only interested in consumer surplus, we need to divide the shaded area by 2. Hence, the consumer surplus is $10,500/2 = $4,500.

Figure: Consumer Surplus Refer to the Figure