Final answer:
Total surplus in a market is the area below the demand curve and above the supply curve, combining consumer and producer surplus. The correct option is option e.
Step-by-step explanation:
When analyzing market equilibrium, total surplus refers to the sum of consumer surplus and producer surplus. The correct answer to the question is below the demand curve and above the supply curve. This area represents the total benefit to society, comprising both consumer and producer surplus.
Consumer surplus is the area below the demand curve and above the market price, and it represents the difference between what consumers are willing to pay and what they actually pay.
On the other hand, producer surplus is the area above the supply curve and below the market price, signifying the difference between the market price and the price at which producers are willing to sell.