In the figure below,the firm's total producer surplus,if it is producing 18 units of output and receiving a price of $36 per unit,is ________.

Question

Quizplus · Accepted Answer

The producer surplus is the area above the supply curve and below the price at which the firm is selling its output. At a price of $36 per unit, the firm is willing to produce 18 units of output, which is where the supply curve intersects the quantity axis. To find the producer surplus, we need to calculate the area above the supply curve and below the price level of $36, between the quantities of 0 and 18.

The area of the shaded triangle is 1/2 * base * height = 1/2 * 18 * (54-0) = $486. Therefore, the producer surplus at a price of $36 and a quantity of 18 units is $486 - $162 = $324.

In the Figure Below,the Firm's Total Producer Surplus,if It Is