Chapter 8, Problem 10P

To determine

the diagram and explain given statements.

Concept Introduction

Consumer Surplus: Consumer surplus is the surplus occurring due to difference in the amount that a consumer is willing to pay for a good or service and the amount that is actually paid by the consumer.

Producer Surplus: Producer surplus is the surplus occurring due to difference in the amount at which a good or service is sold by the producer and the amount at which the producer is willing to sell the good or service.