-Which area in the above figure shows the producer surplus at the price and quantity that would be attained if the industry were perfectly competitive?
A) A + B + C + D + E
B) C + D + E + F + G + H
C) F + G + H
D) F + G + H + I + J + K

Question

-Which area in the above figure shows the producer surplus at the price and quantity that would be attained if the industry were perfectly competitive?
A) A + B + C + D + E 
B) C + D + E + F + G + H 
C) F + G + H 
D) F + G + H + I + J + K

Quizplus · Accepted Answer

The producer surplus is the area above the supply curve and below the price line. In a perfectly competitive market, the supply curve is horizontal at the equilibrium price, so the producer surplus is the rectangle formed by the equilibrium price, the equilibrium quantity, and the supply curve. In the diagram, this rectangle is F + G + H.

-Which Area in the Above Figure Shows the Producer Surplus