Figure 9.4.2
-Refer to Figure 9.4.2 above. Before this policy was implemented, producer surplus was:
A) $10.
B) $2000.
C) $4000.
D) $6000.
E) $12000.

Question

Figure 9.4.2
-Refer to Figure 9.4.2 above. Before this policy was implemented, producer surplus was:
A) $10. 
B) $2000. 
C) $4000. 
D) $6000. 
E) $12000.

Quizplus · Accepted Answer

Producer surplus is the area above the supply curve but below the price level, up to the quantity sold. Before the policy, assuming a competitive market equilibrium, the producer surplus would be represented by a triangle with a base (quantity) and height (price) that, when calculated, equals $2000.

Figure 9.4.2 -Refer to Figure 9.4.2 Above. Before This Policy Was Implemented