Table 4-7

-Refer to Table 4-7.The equations above describe the demand and supply for Bubba's Fried Jellybeans.The equilibrium price and quantity for Bubba's Fried Jellybeans are $40 and 5 thousand units.What is the value of producer surplus?
A)$5 thousand
B)$12.5 thousand
C)$25 thousand
D)$37.5 thousand

Question

Table 4-7
 
-Refer to Table 4-7.The equations above describe the demand and supply for Bubba's Fried Jellybeans.The equilibrium price and quantity for Bubba's Fried Jellybeans are $40 and 5 thousand units.What is the value of producer surplus?
A)$5 thousand 
B)$12.5 thousand 
C)$25 thousand 
D)$37.5 thousand

Quizplus · Accepted Answer

Producer surplus is calculated as the area of the triangle formed by the supply curve, the equilibrium price, and the vertical axis. With an equilibrium price of $40 and quantity of 5 thousand units, the producer surplus is 0.5 * (40 - 0) * 5 = $12.5 thousand.

Table 4-7 -Refer to Table 4-7.The Equations Above Describe the Demand and Describe