Figure 7-16
-Refer to Figure 7-16.If the price of the good is $500,then producer surplus amounts to
A)$450.
B)$575.
C)$700.
D)$800.

Question

Figure 7-16 
-Refer to Figure 7-16.If the price of the good is $500,then producer surplus amounts to
A)$450. 
B)$575. 
C)$700. 
D)$800.

Quizplus · Accepted Answer

Producer surplus is the area above the supply curve and below the price level. If the price is $500, the producer surplus is calculated as the area of the triangle formed by the price line, the supply curve, and the vertical axis. The correct calculation leads to a producer surplus of $700.

Figure 7-16 -Refer to Figure 7-16.If the Price of the Good Is