Figure 7-3
-Refer to Figure 7-3.At the equilibrium price,producer surplus is
A) $600.
B) $900.
C) $1,200.
D) $1,800.

Question

Figure 7-3 
-Refer to Figure 7-3.At the equilibrium price,producer surplus is
A) $600. 
B) $900. 
C) $1,200. 
D) $1,800.

Quizplus · Accepted Answer

At the equilibrium price, producer surplus is the area above the supply curve and below the equilibrium price. This is the triangle bounded by the vertical axis, the equilibrium price, and the point where the supply curve intersects the demand curve. In this case, the equilibrium price is $6 and the point of intersection is 300 units. Therefore, the producer surplus is:

0.5 x ($6 - $2) x 300 = $900

Therefore, the correct answer is B, $900.

Figure 7-3 -Refer to Figure 7-3.At the Equilibrium Price,producer Surplus Is