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Figure: The Market for Sandwiches
-(Figure: The Market for Sandwiches)Use Figure: The Market for Sandwiches.Suppose that a price floor is set at $7.At this price,consumer surplus is equal to _____ and producer surplus is equal to _____.
A) $64;$40
B) $64;$24
C) $32;$24
D) $32;$40

Question

Use the following to answer questions:
Figure: The Market for Sandwiches 
-(Figure: The Market for Sandwiches)Use Figure: The Market for Sandwiches.Suppose that a price floor is set at $7.At this price,consumer surplus is equal to _____ and producer surplus is equal to _____.
A) $64;$40 
B) $64;$24 
C) $32;$24 
D) $32;$40

Quizplus · Accepted Answer

At a price floor of $7, the quantity demanded is 4 and the quantity supplied is 8. 
Consumer surplus = 0.5*(9-7)*4 = $4
Producer surplus = (7-3)*4 = $16
Total surplus = $20, which is the sum of consumer and producer surplus. 
Therefore, the correct choice is D) $32; $40.

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