Use the following to answer question:
-(Figure: Producer Surplus II) Look at the figure Producer Surplus II.If the price falls from P₂ to P₁,producer surplus decreases by the area:

Question

Use the following to answer question:

-(Figure: Producer Surplus II) Look at the figure Producer Surplus II.If the price falls from P₂ to P₁,producer surplus decreases by the area:

Quizplus · Accepted Answer

Producer surplus is the area above the supply curve but below the price level. When the price falls from P₂ to P₁, the producer surplus decreases by the area between these two price levels, above the supply curve, which is represented by D) P₂P₁KM.

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