Equilibrium Expenditure in Coffee Market

Steps:

• Identify equilibrium where demand equals supply: at $10 per kilo, both are 20 kilos.
• Calculate total expenditure using formula: price multiplied by equilibrium quantity.
• Multiply $10 by 20 kilos to get$200.
• Confirm this matches option C.

Why C is correct:

• Total expenditure equals equilibrium price times equilibrium quantity, per basic market definition, yielding $10 × 20 =$200.

Why the others are wrong:

• A: Equals only the equilibrium price, ignoring quantity.
• B: Equals only the equilibrium quantity, ignoring price.
• D: Incorrectly doubles the expenditure, possibly from misreading data.

Final answer: C