The figure below shows the demand (D) and supply (S) curves for Good X before and after a tax is imposed on each unit of the good sold.

-Refer to the figure above.The producer surplus before the imposition of the tax is given by the area ________.

Question

The figure below shows the demand (D) and supply (S) curves for Good X before and after a tax is imposed on each unit of the good sold.
 
-Refer to the figure above.The producer surplus before the imposition of the tax is given by the area ________.

Quizplus · Accepted Answer

Producer surplus before the imposition of the tax is the area above the supply curve and below the equilibrium price. In this case, before the tax, producer surplus is given by the area GAE.

The Figure Below Shows the Demand (D) and Supply (S)