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Unformatted text preview: $1, but if the going price of the good is $4, A earns a profit (producer surplus PS) of $3. B would sell for $2, but since he charges $4 he earns a profit of $2. C earns a profit of $1, while D, the marginal seller, earns no profit, since he is barely willing to sell for the going price of $4. 5/4/10 9:10 PM Blackboard Learn Page 2 of 2 https://blackboard.usc.edu/webapps/portal/frameset.jsp?tab_tab_grooard%2Fexecute%2Flauncher%3Ftype%3DCourse%26id%3D_37604_1%26url%3D Figure 4.b.2 In Figure 4.b.2, we see that at a price of $7, producer surplus is $20 (blue). If the price rises to $10, then existing sellers gain (3x8)=$24 each (yellow) while new sellers gain (3x4)/2=$6 (green)....
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- Spring '07
- Producer Surplus