4 3 points Which area represents consumer surplus when the p

4) (3 points) Which area represents consumer surplus when the price is P1? Price Supply P2 P1-- Demand Q1 Quantit

Solution

4)

The area B represent consumer surplus when the price is p1.

As the price P1 is equilibrium or market clearing price where quantity demanded is equal to quantity supplied. Consumers have a surplus represented by area B.