(Figure: Supply Curve 2) Use the supply curve for bottles of dish soap in the graph to answer the question.
If 15 bottles are sold at a price of $8, what is the total producer surplus?

A)$0
B)$6
C)$45
D)$90

Question

(Figure: Supply Curve 2) Use the supply curve for bottles of dish soap in the graph to answer the question.
If 15 bottles are sold at a price of $8, what is the total producer surplus?

A)$0 
B)$6 
C)$45 
D)$90

Quizplus · Accepted Answer

To calculate producer surplus, we need to find the area between the supply curve and the price at which the good is sold. In this case, the price is $8 and the quantity sold is 15. To find the producer surplus, we need to calculate the area of the triangle formed by the $8 price, the y-axis, and the point on the supply curve where 15 bottles are supplied. Using the formula for the area of a triangle (base x height / 2), we get:

(15 bottles x ($8 - $5) / 2) = $45

Therefore, the total producer surplus is $45. Answer choice C is the correct answer.

(Figure: Supply Curve 2) Use the Supply Curve for Bottles