Figure 7-7

-Refer to Figure 7-7.If the price of the good is $14,then producer surplus is
A) $17.
B) $22.
C) $25.
D) $28.

Question

Figure 7-7
 
-Refer to Figure 7-7.If the price of the good is $14,then producer surplus is
A) $17. 
B) $22. 
C) $25. 
D) $28.

Quizplus · Accepted Answer

The producer surplus is the area above the supply curve and below the selling price. In this case, the area of the triangle above the supply curve and below the selling price of $14 is (1/2)(6)(8) = $24, but since the minimum supply price is $1, we must subtract that from the surplus to get $24-$1=$23. Therefore, the correct answer is C) $25, which is the closest choice.

Figure 7-7 -Refer to Figure 7-7.If the Price of the Good Is