Use the following to answer questions:
Figure: Producer Surplus
-(Figure: Producer Surplus) Look at the figure Producer Surplus. Total producer surplus is _____ when the price is $40.
A) $40
B) $60
C) $80
D) $85

Question

Use the following to answer questions:
Figure: Producer Surplus 
-(Figure: Producer Surplus) Look at the figure Producer Surplus. Total producer surplus is _____ when the price is $40.
A) $40 
B) $60 
C) $80 
D) $85

Quizplus · Accepted Answer

Producer surplus is the area above the supply curve and below the price level. If the price is $40, the producer surplus is calculated as the area of the triangle formed, which is 0.5 * base * height = 0.5 * 4 * 40 = $80.

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