Producer surplus can be calculated as:
A) , where Qe and Pe are the equilibrium quantity and price, respectively, and P(QD) is the inverse demand curve.
B) , where Qe and Pe are the equilibrium quantity and price, respectively, and P(QS) is the inverse supply curve.
C) , where Qe is the quantity that would occur in free-market equilibrium and P(QD) and P(QS) are inverse demand and supply, respectively.
D) , where Qa denotes actual quantity, Qe is the quantity that would occur in free-market equilibrium, and P(QD) and P(QS) are inverse demand and supply, respectively.
Correct Answer:
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