Question

7. At a price of $2.00, total surplus is A. larger than it would be at the equilibrium price. B. the same as it would be at the equilibrium price. C. smaller than it would be at the equilibrium price. D. There is insufficient information to make this determination.

Answer 1

Answer: Option (D) is correct.

Step-by-step explanation:

There is insufficient information for making any comments on the total surplus when price is $2.00.

Total surplus is a combination of two components that are producer surplus and consumer surplus.

we are not able to comment anything on total surplus untill we have some details on equilibrium price. Once the details of equilibrium are available then we are able to measure total surplus.