Graph 8-3
-According to Graph 8-3, after the tax is levied, producer surplus is:
A)$375
B)$750
C)$1500
D)$1125

Question

Graph 8-3  
-According to Graph 8-3, after the tax is levied, producer surplus is:
A)$375 
B)$750 
C)$1500 
D)$1125

Quizplus · Accepted Answer

Producer surplus is the area above the supply curve and below the price line. After the tax is levied, the price line shifts down, reducing producer surplus. The area of the triangle formed by the new price line, the supply curve, and the vertical axis represents the loss in producer surplus. This area is $375.