Refer to Figure 66 Suppose that the equilibrium quantity is

Refer to Figure 6.6. Suppose that the equilibrium quantity is 100. Consumer surplus is equal to:

Select one:

a. $20,000.

b. $10,000.

c. $200.

d. $30,000.

600 500---- 400 L- 50 100 150 Quality of apartments Figure 6.6

Solution

Equilibrium quantity is 100

Equilibrium price is 500.

Consumer surplus=(1/2) (base) (height)

=(1/2)(equilibrium quantity)(price when quantity is 0 - equilibrium price)

=(1/2)(100)(700-500)=10,000 $

Hence correct option is b.