Figure 7-13

-Refer to Figure 7-13.If the price of the good is $500,then producer surplus amounts to
A) $450.
B) $575.
C) $700.
D) $800.

Question

Figure 7-13
 
-Refer to Figure 7-13.If the price of the good is $500,then producer surplus amounts to
A) $450. 
B) $575. 
C) $700. 
D) $800.

Quizplus · Accepted Answer

Producer surplus is the area above the supply curve and below the price level. If the price is $500, the producer surplus is calculated by finding the area of the triangle formed by the price line and the supply curve. The correct calculation leads to a producer surplus of $700.

Figure 7-13 -Refer to Figure 7-13.If the Price of the Good Is