Figure 7-8
-Refer to Figure 7-8.If the supply curve is S,the demand curve is D,and the equilibrium price is $100,what is the producer surplus?

Question

Figure 7-8 
-Refer to Figure 7-8.If the supply curve is S,the demand curve is D,and the equilibrium price is $100,what is the producer surplus?

Quizplus · Accepted Answer

The producer surplus can be found by subtracting the cost of production (which is the equilibrium price) from the price at which producers are willing to sell (which is represented by the upward-sloping supply curve). In this case, the producer surplus is the area above the supply curve and below the equilibrium price. This is a trapezoid with a height of $100 and a base (the distance between the vertical axes and the equilibrium quantity) of 50 units. The area of this trapezoid is (1/2)(100+150)(50) = $2,500. Therefore, the correct choice is C.

Figure 7-8 -Refer to Figure 7-8.If the Supply Curve Is S,the Demand