Figure 7-13
-Refer to Figure 7-13.If the equilibrium price is $60,what is the producer surplus?
A)$600
B)$1,200
C)$2,400
D)$4,800

Question

Figure 7-13 
-Refer to Figure 7-13.If the equilibrium price is $60,what is the producer surplus?
A)$600 
B)$1,200 
C)$2,400 
D)$4,800

Quizplus · Accepted Answer

Producer surplus is the area above the supply curve and below the equilibrium price. In this case, the equilibrium price is $60 and the supply curve is a straight line with a slope of 2. The producer surplus is therefore a triangle with a base of 40 (the difference between the equilibrium quantity and the quantity supplied at the equilibrium price) and a height of 60. The area of a triangle is (1/2) * base * height, so the producer surplus is (1/2) * 40 * 60 = $1,200.

Figure 7-13 -Refer to Figure 7-13.If the Equilibrium Price Is $60,what Is