Figure 7-6

-Refer to Figure 7-6.At the equilibrium price,what would producer surplus be

Question

Figure 7-6
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-Refer to Figure 7-6.At the equilibrium price,what would producer surplus be

Quizplus · Accepted Answer

To find the producer surplus at equilibrium price, we need to first identify the equilibrium price, which is the point where the demand and supply curve intersects.

Looking at the graph, we can see that the equilibrium price is $8. At this price, the quantity supplied and quantity demanded is 80.

To find the producer surplus, we need to calculate the area above the supply curve and below the equilibrium price.

The producer surplus is calculated as follows:

Producer surplus = (Price received - Minimum price producer is willing to accept) x Quantity

The minimum price that producers are willing to accept is $4 (the point where the supply curve intersects the y-axis).

So,

Producer surplus = ($8 - $4) x 80 
Producer surplus = $320 x 2 
Producer surplus = $640

Therefore, the correct answer is B) $640.

Figure 7-6 ​

Figure 7-6