Figure 9-11

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

Question

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

Quizplus · Accepted Answer

Producer surplus is the difference between the price at which producers are willing to sell and the actual price they receive. In the graph, the market price is $8 per unit, and the supply curve shows that producers are willing to supply 1,200 units at that price. The area above the supply curve and below the market price ($8) represents producer surplus. 
So, producer surplus after trade is:
Producer surplus = 1/2 x base x height
= 1/2 x (1,200 units) x ($8 - $2)
= $4,800 + $1,600
= $6,400. 
Therefore, the correct choice is C.

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