The figure to the right illustrates the market for seats at a concert, which wil

Question

The figure to the right illustrates the market for seats at a concert, which will be held in a local stadium that seats 20,000 people. 10 Supply What is the value of producer surplus in this market? Enter your response as an integer) 7.00 How does it differ from the producer surplus in the markets you have studied up totis point? Unlike in most other examples, in this case 5.00 0 A, the firm's producer surplus is a positive amount. the firm's total revenue is greater than producer surplus. the firm's producer surplus is equal to consumer surplus. the firm's cost of production equals producer surplus. the firm's total revenue equals producer surplus. 4.00 O B. O c. O D. E. 2.00 Demand 0.00 5000 10000 15000 20000 25000 30000 Quantity

Explanation / Answer

The value of the producer surplus in this market = area of the rectangle = $3(20,000) = $ 60,000

In most of the markets producer surplus is different from firm's revenue .But in this case firm's total revenue equals producer surplus. Therefore, option (E) is correct.

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