Figure 9-11

-Refer to Figure 9-11.Producer surplus before trade is

Question

Figure 9-11
 
-Refer to Figure 9-11.Producer surplus before trade is

Quizplus · Accepted Answer

Producer surplus before trade is the area above the supply curve and below the market price. In this case, the market price is $12, and the supply curve is a straight line with a slope of 1. The area above the supply curve and below the market price is a triangle with a base of 400 and a height of 12. The area of a triangle is (1/2) * base * height, so the area of this triangle is (1/2) * 400 * 12 = $2,400.

Figure 9-11 -Refer to Figure 9-11.Producer Surplus Before Trade Is