Asked by Shauntae Davis on Jul 12, 2024
Verified
Refer to Figure 9-5. Producer surplus in this market before trade is
A) C.
B) B + C.
C) A + B + D.
D) B + C + D.
Producer Surplus
The difference between what producers are willing to accept for a good or service and what they actually receive.
Trade
The exchange of goods, services, or both between two or more parties, either within a country or between countries.
- Learn about how trade modifies consumer and producer surplus.
Verified Answer
KM
Kidus MengesteabJul 18, 2024
Final Answer :
B
Explanation :
Producer surplus is the area above the supply curve and below the market price. Before trade, the market price is P1, so the producer surplus is the area B + C.
Learning Objectives
- Learn about how trade modifies consumer and producer surplus.