Graph 7-3
-According to Graph 7-3, area B represents:
A)producer surplus to new producers entering the market as the result of price rising from P₁ to P₂
B)the increase in consumer surplus that results from an upward-sloping supply curve
C)a decrease in producer surplus to each producer in the market
D)an increase in total surplus when sellers are willing and able to increase supply from Q₁ to Q₂

Question

Graph 7-3 
-According to Graph 7-3, area B represents:
A)producer surplus to new producers entering the market as the result of price rising from P₁ to P₂ 
B)the increase in consumer surplus that results from an upward-sloping supply curve 
C)a decrease in producer surplus to each producer in the market 
D)an increase in total surplus when sellers are willing and able to increase supply from Q₁ to Q₂

Quizplus · Accepted Answer

Area B represents producer surplus to new producers entering the market as the result of price rising from P₁ to P₂. This is because the area between the supply curve and the new equilibrium price (P₂) represents the additional revenue earned by new producers entering the market, which is the producer surplus. Therefore, option A is the correct choice.

Graph 7-3 -According to Graph 7-3, Area B Represents