According to the graph shown, producer surplus is:
A) $36.
B) $48.
C) $120.
D) None of these.

Question

According to the graph shown, producer surplus is:
A) $36. 
B) $48. 
C) $120. 
D) None of these.

Quizplus · Accepted Answer

To find the producer surplus, we need to find the area above the supply curve and below the equilibrium price. In this case, the equilibrium price is $8 and the area above the supply curve and below $8 is a triangle with a base of 6 and a height of 8. Therefore, the producer surplus is 1/2(6)(8) = $24. However, we need to double this amount since there are two producers in the market. Therefore, the total producer surplus is $48, which is option B.

According to the Graph Shown, Producer Surplus Is