Use the figure below to answer the following questions. Figure 5.2.6
-Figure 5.2.6 shows the supply curve of DVD rentals for Morgan's Marvellous Movies.If Morgan's rents the fifth DVD at a price of $7,what is the producer surplus on that rental?
A)$28
B)$3
C)$7
D)$6
E)$1

Question

Use the figure below to answer the following questions.  Figure 5.2.6
-Figure 5.2.6 shows the supply curve of DVD rentals for Morgan's Marvellous Movies.If Morgan's rents the fifth DVD at a price of $7,what is the producer surplus on that rental?
A)$28 
B)$3 
C)$7 
D)$6 
E)$1

Quizplus · Accepted Answer

Producer surplus is the difference between the price received and the marginal cost. If the fifth DVD is rented at $7 and the marginal cost is $6, the producer surplus is $1.

Use the Figure Below to Answer the Following Questions