Graph 8-3

-According to Graph 8-3, producer surplus before the tax equals:

Name: Graph 8-3 -According to Graph 8-3, producer surplus before the tax equals:
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Question

Graph 8-3
 
-According to Graph 8-3, producer surplus before the tax equals:

Quizplus · Accepted Answer

Producer surplus before the tax is the area below the supply curve and above the equilibrium price. In this case, the equilibrium price is $20 and the supply curve is a straight line with a slope of 1. Therefore, the producer surplus is a triangle with a base of 120 and a height of 20, which equals $1200.

Graph 8-3 -According to Graph 8-3, Producer Surplus Before the Tax Equals