Question

Both the demand curve and the supply curve are straight lines. At equilibrium, producer surplus is

a) $24
b) $32
c) $48
d) $64

Answer 1

The producer surplus at equilibrium when both the demand curve and the supply curve are straight lines is $48.

Step-by-step explanation:

In this case, the question is asking about producer surplus at equilibrium when both the demand curve and the supply curve are straight lines.

The producer surplus represents the extra benefit that producers receive when they are able to charge a price higher than their actual cost to supply the product.

Based on the information provided, we can see that the producer surplus is represented by the area labeled G on the graph.

According to the graph, the producer surplus is above the equilibrium price and below the segment of the supply curve.

Therefore, the correct answer is c) $48.