Figure 3-15
Refer to Figure 3-15. Which area represents the increase in producer surplus when the price rises from P ₁ to P ₂ due to new producers entering the market?

Question

Figure 3-15 Refer to Figure 3-15. Which area represents the increase in producer surplus when the price rises from P ₁ to P ₂ due to new producers entering the market?

Quizplus · Accepted Answer

The area representing the increase in producer surplus due to new producers entering the market is the triangular area above the supply curve (S1) and below the line connecting the old equilibrium price (P) and the new equilibrium price (P_{2). This triangular area is represented by the DEF region in the graph. Therefore, the correct answer is C - DEF.}

Figure 3-15 Refer to Figure 3-15. Which Area Represents the Increase in the Increase