Figure 8-6
The vertical distance between points A and B represents a tax in the market.
-Refer to Figure 8-6.Without a tax,producer surplus in this market is
A)$1,500.
B)$2,400.
C)$3,000.
D)$3,600.

Question

Figure 8-6
The vertical distance between points A and B represents a tax in the market. 
-Refer to Figure 8-6.Without a tax,producer surplus in this market is
A)$1,500. 
B)$2,400. 
C)$3,000. 
D)$3,600.

Quizplus · Accepted Answer

Producer surplus is the area above the supply curve and below the price line. In this case, the producer surplus is the area of the triangle formed by the supply curve, the price line, and the vertical axis. The base of the triangle is 100 units, and the height is $24. Therefore, the area of the triangle is (1/2) * 100 * 24 = $1,200.

Figure 8-6 the Vertical Distance Between Points a and B Represents a Represents