Figure 7-16
-Refer to Figure 7-16.Suppose the price of the good is $400.Then,on the first unit of the good that is sold,producer surplus amounts to
A)$200.
B)$300.
C)$400.
D)$450.

Question

Figure 7-16 
-Refer to Figure 7-16.Suppose the price of the good is $400.Then,on the first unit of the good that is sold,producer surplus amounts to
A)$200. 
B)$300. 
C)$400. 
D)$450.

Quizplus · Accepted Answer

Producer surplus is the difference between the price at which a producer is willing to sell a good and the actual price received. In this case, the producer is willing to sell the first unit of the good for $600, but since the market price is $400, the producer surplus for the first unit is $200 ($600 - $400 = $200). Therefore, the correct answer is B.

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