Use the following to answer questions:
Figure: Producer Surplus
-(Figure: Producer Surplus) In the diagram, if the market price of coffee is $4, how much producer surplus do suppliers earn?
A) $15
B) $45
C) $20
D) $22.50

Question

Use the following to answer questions:
Figure: Producer Surplus 
-(Figure: Producer Surplus) In the diagram, if the market price of coffee is $4, how much producer surplus do suppliers earn?
A) $15 
B) $45 
C) $20 
D) $22.50

Quizplus · Accepted Answer

At a market price of $4, the quantity supplied is 70 units. The producer surplus is the area above the supply curve and below the market price. The triangle above the supply curve and below the point where quantity supplied is 70 corresponds to a producer surplus of $22.50.

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