Use the following to answer question:
-(Figure: Producer Surplus III)Look at the figure Producer Surplus III.If the price of the good decreases from $2 to $1,producer surplus will decrease by:
A)$5.
B)$15.
C)$25.
D)$35.

Question

Use the following to answer question: 
-(Figure: Producer Surplus III)Look at the figure Producer Surplus III.If the price of the good decreases from $2 to $1,producer surplus will decrease by:
A)$5. 
B)$15. 
C)$25. 
D)$35.

Quizplus · Accepted Answer

Producer surplus is the area above the supply curve but below the price level. When the price decreases from $2 to $1, the producer surplus decreases by the area of the rectangle that is no longer included, which is $15 in this context.

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