Figure 8-5

-Refer to Figure 8-5.Without the tax,what would the producer surplus be in this market
A)$1500
B)$2400
C)$3000
D)$3600

Question

Figure 8-5
 
-Refer to Figure 8-5.Without the tax,what would the producer surplus be in this market
A)$1500 
B)$2400 
C)$3000 
D)$3600

Quizplus · Accepted Answer

Producer surplus is the difference between the price a seller receives and the minimum price they are willing to accept for a good or service. In Figure 8-5, the equilibrium price without tax is $8 and the cost of production for each unit is $4. Therefore, the producer surplus per unit is $4. The quantity supplied at the equilibrium price is 600, so the total producer surplus would be $4 x 600 = $2400.

Figure 8-5 -Refer to Figure 8-5.Without the Tax,what Would the Producer Surplus