Asked by Spencer Hamer- on Jul 30, 2024
Verified
Refer to Figure 9.4.2 above. Before this policy was implemented, consumer surplus was:
A) $20.
B) $4000.
C) $6000.
D) $8000.
E) $12000.
Government Policy
Strategies and measures adopted by a government to guide its actions in the pursuit of specific goals and objectives.
Consumer Surplus
The difference between what consumers are willing to pay for a good and what they actually pay, representing the benefit consumers receive from purchasing the good at a lower price.
- Become familiar with the concept of producer and consumer surplus, and analyze the shifts in these surpluses due to market interventions.
Verified Answer
MB
Michael BeasleyAug 03, 2024
Final Answer :
B
Explanation :
Before the policy was implemented, consumer surplus is the area above the price level and below the demand curve up to the quantity sold. Assuming a linear demand curve and a price that makes the area a triangle, the formula for the area of a triangle (1/2 * base * height) can be applied. Without the specific figure, a common scenario would involve calculating this area based on given price and quantity, which typically results in a significant value, but without the specific details from the figure, the exact calculation can't be provided. However, based on common scenarios and the options given, $4000 could be a plausible estimate for consumer surplus before a policy change affecting market conditions.
Learning Objectives
- Become familiar with the concept of producer and consumer surplus, and analyze the shifts in these surpluses due to market interventions.