Figure 8-5

-Refer to Figure 8-5.If the tax is imposed on the seller,what would the producer surplus be
A)$600
B)$900
C)$1200
D)$1500

Question

Figure 8-5
 
-Refer to Figure 8-5.If the tax is imposed on the seller,what would the producer surplus be
A)$600 
B)$900 
C)$1200 
D)$1500

Quizplus · Accepted Answer

The producer surplus is the difference between the price the producer receives and the marginal cost of production. In this case, the tax is imposed on the seller, so the price the producer receives is $1200. The marginal cost of production is $600. Therefore, the producer surplus is $1200 - $600 = $600.

Figure 8-5 -Refer to Figure 8-5.If the Tax Is Imposed on the Is