-In the above figure, if the market price rises from $100 to $125 per ton of wheat, then producer surplus
A) decreases.
B) does not change.
C) increases.
D) might increase, decrease, or not change depending on how the demand curve for wheat shifts.

Question

-In the above figure, if the market price rises from $100 to $125 per ton of wheat, then producer surplus
A) decreases. 
B) does not change. 
C) increases. 
D) might increase, decrease, or not change depending on how the demand curve for wheat shifts.

Quizplus · Accepted Answer

Producer surplus increases because the higher market price allows producers to receive more revenue for each unit sold, thus increasing the area above the supply curve and below the new price level.

-In the Above Figure, If the Market Price Rises from $100