The figure below shows the marginal cost (circles) and the average variable cost (crosses) of a firm in a competitive market. The firm always makes the choice to maximize its profit.

-Refer to the figure above.If the market price of the product is $5,000,what is the firm's producer surplus?

Question

The figure below shows the marginal cost (circles) and the average variable cost (crosses) of a firm in a competitive market. The firm always makes the choice to maximize its profit.
 
-Refer to the figure above.If the market price of the product is $5,000,what is the firm's producer surplus?

Quizplus · Accepted Answer

Producer surplus is the difference between what producers are willing to accept for a good versus what they actually receive. It's represented by the area above the supply curve but below the market price. Without seeing the figure, a precise calculation can't be provided, but based on the given answer options, if the market price is $5,000 and option C is correct, it suggests that the calculation relevant to the figure results in a producer surplus of $13,700.

The Figure Below Shows the Marginal Cost (Circles) and the Average