Use the following information to answer the following questions.
The following graph depicts a market where a tax has been imposed.P e was the equilibrium price before the tax was imposed,and Q e was the equilibrium quantity.After the tax,P C is the price that consumers pay,and P S is the price that producers receive.Q T units are sold after the tax is imposed.NOTE: The areas B and C are rectangles that are divided by the supply curve S T .Include both sections of those rectangles when choosing your answers.

-Which areas represent producer surplus before the tax is imposed?

Question

Use the following information to answer the following questions.
The following graph depicts a market where a tax has been imposed.P e was the equilibrium price before the tax was imposed,and Q e was the equilibrium quantity.After the tax,P C is the price that consumers pay,and P S is the price that producers receive.Q T units are sold after the tax is imposed.NOTE: The areas B and C are rectangles that are divided by the supply curve S T .Include both sections of those rectangles when choosing your answers.
 
-Which areas represent producer surplus before the tax is imposed?

Quizplus · Accepted Answer

Producer surplus is the area above the supply curve and below the price level up to the quantity sold. Choice B correctly identifies these areas before a tax is imposed.

Use the Following Information to Answer the Following Questions