The following figure shows equilibrium at the industry and firm level.Figure 10.6
In the figure,
S1, S2, S3 are the market supply curves.D1 and D2 are the market demand curves.MC is the marginal cost curve of the firm.MR1 and MR2 are the marginal revenue curves of the firm.ATC is the average-total-cost curve of the firm.
-Graphically, producer surplus is the area:
A) above the equilibrium price and below the demand curve.
B) below the equilibrium price and below the supply curve.
C) above the supply curve and below the demand curve.
D) below the equilibrium price and above the supply curve.
E) below the equilibrium price and above the demand curve.
Correct Answer:
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