Question

Refer to Exhibit 4-8. If the wheat market is in competitive equilibrium the producers’ surplus will equal Group of answer choices

area 1 + 2 + 3

area 1 + 2 + 4

area 3 + 5

area 1 + 2 + 3 + 4 + 5

area 6

Answer 1

The producers' surplus in a competitive equilibrium is equal to area 1 + 2 + 4.

Step-by-step explanation:

The producers' surplus in a competitive equilibrium is equal to area 1 + 2 + 4. This is because the area labeled by G represents the producer surplus, which shows that the equilibrium price received in the market was more than what many of the producers were willing to accept for their products. The area labeled by F represents the consumer surplus, which is not included in the calculation of the producers' surplus.