-Refer to Figure 5-3. What is the value of producer surplus at a price of $18?

Question

Quizplus · Accepted Answer

Producer surplus is the difference between the price producers receive for a good and the minimum price they are willing to accept. At a price of $18, producers are willing to supply 12 units of the good. The total revenue they receive is $18 x 12 = $216. The minimum price they are willing to accept is $12, so their producer surplus is $216 - $144 = $72.