In a figure that shows a supply curve and a demand curve,producer surplus is the area
A) below the demand curve and above the market price.
B) below the supply curve and above the market price.
C) above the demand curve and below the market price.
D) above the supply curve and below the market price.
E) between the demand curve and the supply curve.

Question

Quizplus · Accepted Answer

Producer surplus is the difference between the market price and the cost of production for producers. This area can be represented as the triangle above the supply curve and below the market price. Therefore, option D is correct.

In a Figure That Shows a Supply Curve and a Demand