The maximum buying price is $10, the price paid is $4, the minimum selling price is $2, and the price received is $4. It follows that ______.
a. consumers' surplus is $14 and producers' surplus is $6
b. producers' surplus is $2 and consumers' surplus is $6
c. consumers' surplus is $6 and producers' surplus is $2
d. consumers' surplus is equal to producers' surplus

To solve this, we need to understand the concepts of **consumer surplus** and **producer surplus**.

1. **Consumer surplus** is the difference between what consumers are willing to pay (maximum buying price) and what they actually pay (price paid).
   - **Maximum buying price** = $10
   - **Price paid** = $4
   - **Consumer surplus** = $10 - $4 = $6

2. **Producer surplus** is the difference between what producers receive (price received) and the minimum they are willing to sell for (minimum selling price).
   - **Price received** = $4
   - **Minimum selling price** = $2
   - **Producer surplus** = $4 - $2 = $2

Thus, the correct answer is:
**c. consumers' surplus is $6 and producers' surplus is $2**

Would you like further details or have any questions? Here are 5 related questions to expand the concept:

1. What is the significance of consumer and producer surplus in market efficiency?
2. How does price elasticity of demand affect consumer surplus?
3. Can producer surplus ever be negative, and under what conditions?
4. How would changes in market equilibrium prices impact surpluses?
5. How do taxes imposed on goods impact consumer and producer surpluses?

**Tip:** Remember that the areas under demand and supply curves up to the equilibrium price represent consumer and producer surpluses respectively.

The maximum buying price is $10, the price paid is $4, the minimum selling price is $2, and the price received is $4. It follows that ______. a. consumers' surplus is $14 and producers' surplus is $6 b. producers' surplus is $2 and consumers' surplus is $6 c. consumers' surplus is $6 and producers' surplus is $2 d. consumers' surplus is equal to producers' surplus

Learn how to calculate consumer and producer surplus based on price data. In this example, the maximum buying price is $10, the price paid is $4, the minimum selling price is $2, and the price received is $4. This problem demonstrates essential concepts in economics for Grades 9-12.

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