Figure 8.6.2
-Refer to Figure 8.6.2 above. Which area represents producer surplus in this figure?
A) ABCD
B) 0DCq*
C) The area inside the MC curve and the AVC curve
D) The area above the MC curve and below the price level, P

Question

Figure 8.6.2
-Refer to Figure 8.6.2 above. Which area represents producer surplus in this figure?
A) ABCD 
B) 0DCq* 
C) The area inside the MC curve and the AVC curve 
D) The area above the MC curve and below the price level, P

Quizplus · Accepted Answer

Producer surplus is the area above the supply curve (or marginal cost curve, MC) up to the price level. In this case, it's the area above the MC curve and below the price level, P, which matches description D.

Figure 8.6.2 -Refer to Figure 8.6.2 Above. Which Area Represents Producer Surplus