Figure 9.1.3
-Refer to Figure 9.1.3 above. If the market is in equilibrium, the producer surplus earned by the seller of the 100th unit is:
A) $0.50.
B) $0.75.
C) $1.50.
D) $2.00.
E) $2.75.

Question

Figure 9.1.3
-Refer to Figure 9.1.3 above. If the market is in equilibrium, the producer surplus earned by the seller of the 100th unit is:
A) $0.50. 
B) $0.75. 
C) $1.50. 
D) $2.00. 
E) $2.75.

Quizplus · Accepted Answer

In equilibrium, the producer surplus is the area above the supply curve and below the market price. The market price in this scenario is $4.00, and the producer of the 100th unit is willing to supply at a cost of $2.50. Therefore, the producer surplus for the 100th unit is ($4.00 - $2.50) x 50 units = $75. So, the correct choice is C, $1.50.

Figure 9.1.3 -Refer to Figure 9.1.3 Above. If the Market Is in Is