The market for Good $X$ is shown here.

Which of the following represents the surplus that would result in this market at a price of $P_{3}$ ?

Choose 1 answer:
(A) $X-Q_{C}$
(B) $P_{3}-P_{5}$
(c) $Q_{C}-Q_{A}$
(©) $Q_{A}-Q_{B}$
() $Q_{B}-Q_{C}$

Question

The market for Good $X$ is shown here.

Which of the following represents the surplus that would result in this market at a price of $P_{3}$ ?

Accepted Answer

∻Solution∻ ‖ a ⋮ Surplus Definition: Consumer surplus is the difference between what consumers are willing to pay and what they actually pay. Producer surplus is the difference between what producers are willing to accept and what they actually receive. ‖ ‖ b ⋮ Surplus at $P_3$: At price $P_3$, the quantity demanded is $Q_c$ and the quantity supplied is $Q_a$. The surplus in this market is the difference between these quantities. ‖ ‖ c ⋮ Calculation: The surplus at price $P_3$ is $Q_c - Q_a$. ‖ ∻Answer∻ ⚹ (C) $Q_{C}-Q_{A}$ ⚹ ∻Key Concept∻ ⚹ Surplus in a market is the difference between the quantity demanded and the quantity supplied at a given price. ⚹ ∻Explanation∻ ⚹ At price $P_3$, the quantity demanded ($Q_c$) exceeds the quantity supplied ($Q_a$), resulting in a surplus of $Q_c - Q_a$. ⚹◊What is the formula to calculate consumer surplus in a market using the supply and demand curves⍭ Generate me a similar question◊

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