Figure 7-3

-Refer to Figure 7-3.Which area represents the increase in producer surplus when the price rises from P₁ to P₂
A)ACF
B)BCE
C)ABED
D)AFEB

Question

Figure 7-3
 
-Refer to Figure 7-3.Which area represents the increase in producer surplus when the price rises from P₁ to P₂
A)ACF 
B)BCE 
C)ABED 
D)AFEB

Quizplus · Accepted Answer

The area AFEB represents the increase in producer surplus when the price rises from P₁ to P₂. This is because the new price P₂ intersects with the supply curve at point E, which creates a new producer surplus area between the old producer surplus area AFE and the new supply curve.

Figure 7-3 -Refer to Figure 7-3.Which Area Represents the Increase in Producer