Figure 4-E
-Refer to Figure 4-E.When the price is P₂, the producer surplus is equal to area:

Question

Figure 4-E -Refer to Figure 4-E.When the price is P₂, the producer surplus is equal to area: A)A. B)B. C)A + B. D)A + B + C.

Quizplus · Accepted Answer

Producer surplus is the difference between the market price and the minimum price at which the producer is willing to supply the product. In this figure, the minimum price at which the producer is willing to supply the product is PS0. At PS1, the producer surplus is area A (the difference between the market price and the supply curve). At P₂, the producer surplus is area A + B (the difference between the market price and the supply curve). Therefore, the correct answer is C, A + B.

Figure 4-E -Refer to Figure 4-E.When the Price Is P2, the Producer

Figure 4-E -Refer to Figure 4-E.When the Price Is P₂, the Producer