Figure 9.3
-Refer to Figure 9.3. If the market is in equilibrium, total producer surplus is
A) $2.
B) $3.
C) $200.
D) $400.
E) $600.

Question

Figure 9.3
-Refer to Figure 9.3. If the market is in equilibrium, total producer surplus is
A) $2. 
B) $3. 
C) $200. 
D) $400. 
E) $600.

Quizplus · Accepted Answer

The total producer surplus is represented by the shaded triangle above the supply curve and below the equilibrium price (intersection of demand and supply curves). The height of the triangle is $4 (the difference between the highest price a producer is willing to accept and the equilibrium price) and the base of the triangle is 100 (the quantity supplied at the equilibrium). Therefore, the area of the triangle is (1/2) x 4 x 100 = $200. Thus, the correct answer is D.

Figure 9.3 -Refer to Figure 9.3. If the Market Is in Equilibrium