Figure 9.7
-Refer to Figure 9.7. Because of this policy, total producer surplus including funds received from the government will be at least
A) $10,000.
B) $40,000.
C) $80,000.
D) $100,000.
E) $160,000.

Question

Figure 9.7
-Refer to Figure 9.7. Because of this policy, total producer surplus including funds received from the government will be at least
A) $10,000. 
B) $40,000. 
C) $80,000. 
D) $100,000. 
E) $160,000.

Quizplus · Accepted Answer

The total producer surplus when selling 20 units at a price of $12 would be $160,000 (20 x $8,000). With the policy in place, the producer is able to receive a minimum price of $16, resulting in a total producer surplus of $320,000 (20 x $16,000). The additional $160,000 comes from the funds received from the government, bringing the total to $480,000 ($320,000 + $160,000). Therefore, the correct answer is C.

Figure 9.7 -Refer to Figure 9.7. Because of This Policy, Total Producer