Figure 7-11
-Refer to Figure 7-11.If the supply curve is S',the demand curve is D,and the equilibrium price is $150,what is the producer surplus?
A)$625
B)$1,250
C)$2,500
D)$5,000

Question

Figure 7-11 
-Refer to Figure 7-11.If the supply curve is S',the demand curve is D,and the equilibrium price is $150,what is the producer surplus?
A)$625 
B)$1,250 
C)$2,500 
D)$5,000

Quizplus · Accepted Answer

Producer surplus is the area above the supply curve and below the equilibrium price. In this case, the producer surplus is the area of the triangle formed by the supply curve, the equilibrium price, and the quantity supplied. The base of the triangle is 10 units, and the height is $50. Therefore, the area of the triangle is 1/2 * 10 * 50 = $250.

Figure 7-11 -Refer to Figure 7-11.If the Supply Curve Is S',the Demand