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< Back to ent Attempts: 0 Average: 0/2 8. Total economic surplus The following diagram shows supply and demand in the market for smartphones. Use the black point (plus symbol) to indicate the equilibrium price and quantity of smartphones. Then use the green point (triangle symbol) to fill the area representing consumer surplus, and use the purple point (diamond symbol) to fill the area representing producer surplus. 225 Demand Equilibrium 175 150 Type here to search

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Homework (Ch 07) to indicate the equilibrium price and quantity of smartphones. Then use the green point (triangle symbol) to fill the consumer surplus, and use the purple point (diamond symbol) to fill the area representing producer surplus. Equilibrium 0 10 20 30 40 5060 TO 80 100

Homework (Ch 07) Equilibrium 175 150 100 Producer Surplus 2 75 50 Supply 0 10 20 30 40 50 670 80 90 100 QUANTITY (Millions of phones) million Total surplus in this market is $ Grade It Now Continue without saving

total market surplus???

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Homework (Ch 07) 225 200 Equilibrium 175 150 Consumer Surplus 125 100 Producer Surplus 75 + 50 Supply 25 t 0 10 20 30 40 50 60 70 80 90 100 QUANTITY (Millions of phones) Total surplus in this market is$ million. Grade It Now Save & C Continue without savit

From the above graph

Equilibrium price = $175

Equilibrium quantity = 60 million

The green shade area above the equillibrium price is consumer surplus and the pink shaded shaded line below equllibrium price is producer surplus

Total surplus = consumer surplus+ producer surplus

Consumer surplus = (1/2) (Change in price ) (Change in quantity)

Producer Surplus = (1/2) (change in price) (change in quantity)

Consumer surplus = (1/2) (200-175)(60-0) = $750 million

Producer surplus = (1/2) (175-50)(60-0) = $3750 million

Total surplus = 750+3750 = $4500 million

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