Graph 9-8

-In Graph 9-8, producer surplus after the tariff would be:
A) G
B) C + G
C) A + C + G
D) A + B + C + G

Question

Graph 9-8
 
-In Graph 9-8, producer surplus after the tariff would be:
A) G 
B) C + G 
C) A + C + G 
D) A + B + C + G

Quizplus · Accepted Answer

Producer surplus is the difference between the price that producers receive and the cost of production. After the implementation of the tariff, the price received by producers (represented by the green line) increases from Pw to Pt. The producer surplus is the area above the supply curve and below the price line. The new producer surplus is represented by the area C + G. Therefore, the correct answer is B.

Graph 9-8 -In Graph 9-8, Producer Surplus After the Tariff Would Be