$4.00 $2.50 D $0.50 200 Quantity (Q) The market shown in the figure above is in equilibrium at the socially optimal quantity of 200 units. The Demand curve ca penefits to consumers, and the Supply curve captures all social costs to producers. In this case, Consumer Surplus will b Select one: O a. $100 b. $300 O c. $200 $150

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Price (P)
S
$4.00
$2.50
D
$0.50
200
Quantity (Q)
The market shown in the figure above is in equilibrium at the socially optimal quantity of 200 units. The Demand curve captures all social
benefits to consumers, and the Supply curve captures all social costs to producers. In this case, Consumer Surplus will be:
Select one:
a. $100
b. $300
C. $200
d. $150
Transcribed Image Text:Price (P) S $4.00 $2.50 D $0.50 200 Quantity (Q) The market shown in the figure above is in equilibrium at the socially optimal quantity of 200 units. The Demand curve captures all social benefits to consumers, and the Supply curve captures all social costs to producers. In this case, Consumer Surplus will be: Select one: a. $100 b. $300 C. $200 d. $150
Expert Solution
Step 1

Equilibrium is achieved at the output level where Qs equals Qd. 

Thus Q*= 200 units

P*= $ 2.50

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