Figure 7-1 Figure 7-1 shows the U.S.demand and supply for leather footwear.
-Refer to Figure 7-1.Suppose the government allows imports of leather footwear into the United States.The market price falls to $24.What area represents consumer surplus?
A)R + S
B)R + S + T + U
C)V + W + X + Y
D)R + S + V

Question

Figure 7-1  Figure 7-1 shows the U.S.demand and supply for leather footwear.
-Refer to Figure 7-1.Suppose the government allows imports of leather footwear into the United States.The market price falls to $24.What area represents consumer surplus?
A)R + S 
B)R + S + T + U 
C)V + W + X + Y 
D)R + S + V

Quizplus · Accepted Answer

Consumer surplus is the area above the market price and below the demand curve. In this case, the market price is $24 and the demand curve intersects the vertical axis at a price of $48. Therefore, consumer surplus is the area bounded by the demand curve, the price line, and the vertical axis, which includes areas R, S, T, and U. Therefore, the correct answer is option B.

Figure 7-1 Figure 7-1 Shows the U