Figure: Monthly Supply of Bread
(Figure: Monthly Supply of Bread) Look at the figure Monthly Supply of Bread.The graph represents the monthly supply of bread at a local bakery.At the current price of $3 per loaf of bread, the bakery produces 120 loaves of bread per month.The producer surplus received by this bakery is equal to:

Question

Quizplus · Accepted Answer

Producer surplus is the area above the supply curve and below the price level. At $3 per loaf, the bakery produces 120 loaves. The producer surplus is calculated as 0.5 * (base * height) = 0.5 * (120 * (3 - 1.5)) = $180.