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Figure 4-3 Price per pound ($) Supply A P2 B C P1 E D Po G H Demand 0 Q2 Q1 Quantity of granola (lbs)
Figure 4-3 Price per pound ($) Supply A P2 B C P1 E D Po G H Demand 0 Q2 Q1 Quantity of granola (lbs) Figure 4-3 shows the market for granola. The market is initially in equilibrium at a price of P1 and a quantity of Q1. Now suppose producers decide to cut output to Q2 in order to raise the price to P2.Refer to Figure 4-3. What area represents producer surplus at P2? O B + C+D +E O B +D +G O B +D O A + B +D
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