Answer to Question #257048 in Macroeconomics for Chiru

Question

On a supply and demand diagram, show: equilibrium price, equilibrium quantity and total revenue received by producers.

Answer 1

The above diagram shows a supply and demand diagram, showing the equilibrium price as P, the equilibrium quantity as Q, and the total revenue received by producers.

Total revenue = (the equilibrium price × the equilibrium quantity)

which is the area of the rectangle shown in the figure.