Table 7-9

-Refer to Table 7-9.Both the demand curve and the supply curve are straight lines.If the price is $8 but only 4 units are bought and sold,producer surplus will be

Question

Table 7-9
 
-Refer to Table 7-9.Both the demand curve and the supply curve are straight lines.If the price is $8 but only 4 units are bought and sold,producer surplus will be

Quizplus · Accepted Answer

Producer surplus is calculated as the area above the supply curve and below the price level. If the price is $8 and 4 units are sold, the producer surplus is the area of the triangle with a base of 4 units and a height of $8, which is (1/2) * 4 * 8 = $16. However, since the question asks for the surplus when only 4 units are bought and sold, the surplus is $24, assuming the supply curve starts at $0.

Table 7-9 -Refer to Table 7-9.Both the Demand Curve and the Supply