Figure 9-9

-Refer to Figure 9-9.What is producer surplus in this market before trade
A)A + B + D
B)B + C
C)B + C + D

Question

Figure 9-9
 
-Refer to Figure 9-9.What is producer surplus in this market before trade
A)A + B + D 
B)B + C 
C)B + C + D

Quizplus · Accepted Answer

Producer surplus is the difference between the price at which producers are willing to sell a product and the actual price they receive. In this case, before trade, producers are willing to sell at a price of P1, but they actually receive a price of P0. The triangle between the supply curve and the actual price represents producer surplus, which is A + B + D.

Figure 9-9 -Refer to Figure 9-9.What Is Producer Surplus in This Market