Multiple Choice
Suppose Bashir is willing to pay \$10 for a unit and Chander is willing to sell the unit for \$6. What is the total economic surplus if Bashir buys a unit from Chander?
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5. Consumer and Producer Surplus; Price Ceilings and Floors
Economic Surplus and Efficiency
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Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
Given a market where the consumer surplus is 80 and the producer surplus is 60, what is the value of economic surplus?
A
60
B
140
C
80
D
20
Verified step by step guidance1
Recall that economic surplus is the sum of consumer surplus and producer surplus in a market.
Identify the given values: consumer surplus (CS) = 80 and producer surplus (PS) = 60.
Write the formula for economic surplus (ES): \(ES = CS + PS\).
Substitute the given values into the formula: \(ES = 80 + 60\).
Add the values to find the total economic surplus.
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