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-(Figure: The Market for Hamburgers)The figure The Market for Hamburgers shows the weekly market for hamburgers in Irvine,Kentucky.If the price of a hamburger is $1 and 200 hamburgers are supplied,producer surplus will equal:
A)$60.
B)$65.
C)$50.
D)$360.

Question

Use the following to answer question: 
-(Figure: The Market for Hamburgers)The figure The Market for Hamburgers shows the weekly market for hamburgers in Irvine,Kentucky.If the price of a hamburger is $1 and 200 hamburgers are supplied,producer surplus will equal:
A)$60. 
B)$65. 
C)$50. 
D)$360.

Quizplus · Accepted Answer

Producer surplus is the difference between total revenue and variable costs. At a price of $1, the total revenue is $200 (quantity supplied) and the variable cost is the area above the supply curve and below the price line, which is a triangle with a base of 200 and a height of 0.5 (the difference between $1 and $0.50, the minimum supply price). Therefore, producer surplus is (0.5 x 200 x 1/2) = 50.

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