Graph 7-1

-Refer to Graph 7-1. What area represents producer surplus when the price is P₁?

Name: Graph 7-1 -Refer to Graph 7-1. What area represents producer surplus when the price is P 1 ? A) A B) B C) C D) D
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Question

Graph 7-1 -Refer to Graph 7-1. What area represents producer surplus when the price is P₁? A) A B) B C) C D) D

Quizplus · Accepted Answer

Producer surplus is the area above the supply curve and below the price. When the price is P₁, the producer surplus is the area above the supply curve (U1B1) and below the price (PS1). Hence, the area represented by C is the producer surplus.

Graph 7-1 -Refer to Graph 7-1. What Area Represents Producer Surplus When