Use the following to answer questions:
Figure: Quantity of Good X
-(Figure: Quantity of Good X) Refer to the figure. At a price of $200, consumer surplus is:
A) $20,000.
B) $40,000.
C) $10,000.
D) $200.

Question

Use the following to answer questions:
Figure: Quantity of Good X 
-(Figure: Quantity of Good X) Refer to the figure. At a price of $200, consumer surplus is:
A) $20,000. 
B) $40,000. 
C) $10,000. 
D) $200.

Quizplus · Accepted Answer

Consumer surplus can be calculated by finding the difference between the maximum amount a consumer is willing to pay (the demand curve) and the price they actually pay. At a price of $200 in the figure, the quantity demanded is 50. The demand curve intersects with the price at a point on the vertical axis where quantity demanded is 50 (which is $400). 
The area of the consumer surplus triangle is:
0.5 x ($400 - $200) x 50 = $10,000. 
Therefore, the correct answer is C.

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