(Figure: Producer Surplus III) Look at the figure Producer Surplus III.If the price of the good decreases from $2 to $1,producer surplus will decrease by:

A) $5.
B) $15.
C) $25.
D) $35.

Question

(Figure: Producer Surplus III) Look at the figure Producer Surplus III.If the price of the good decreases from $2 to $1,producer surplus will decrease by:A) $5.B) $15.C) $25.D) $35.

Alexa Marchand · Accepted Answer

Final Answer : B, Explanation :  Producer surplus is the area above the supply curve but below the price level. When the price decreases from $2 to $1, the producer surplus decreases by the area of the rectangle that is no longer included, which is $15 in this context.

(Figure: Producer Surplus III) Look at the figure Producer Surplus III.If the price of the good decreases from $2 to $1,producer surplus will decrease by:

A) $5.
B) $15.
C) $25.
D) $35.

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Learning Objectives

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