Consumer Surplus and Expenditure in Supply-Demand Equilibrium

Steps:

• Identify equilibrium price and quantity where supply and demand intersect.
• Consumer surplus is the area above equilibrium price and below demand curve, up to quantity sold.
• Consumer expenditure is the rectangle from origin to equilibrium price and quantity.
• Match areas to diagram labels: triangle WXY for surplus, rectangle OYZ for expenditure.

Why B is correct:

• B matches definitions: consumer surplus as triangular area (WXY) per willingness-to-pay exceeding price; expenditure as P×Q rectangle (OYZ).

Why the others are wrong:

• A: OXY understates expenditure by excluding full rectangle to Z.
• C: WYO misidentifies surplus, including non-surplus area below price.
• D: Duplicate of C, incorrect surplus area WYO.

Final answer: B