Exhibit 33-2

-Refer to Exhibit 33-2. The U.S. demand and supply for a good are shown. Under a policy of free trade, the world price is P_W. At this price, producers' surplus equals the area of

Question

Exhibit 33-2 -Refer to Exhibit 33-2. The U.S. demand and supply for a good are shown. Under a policy of free trade, the world price is P_W. At this price, producers' surplus equals the area of

Quizplus · Accepted Answer

Producer surplus is the area above the supply curve and below the price level. At the world price P_W, the producer surplus is the area under this price and above the supply curve, which is represented by P_WDE.

Exhibit 33-2 ​

Exhibit 33-2