Producer Surplus as Area Above Supply Curve

Steps:

• Locate equilibrium price (likely line at Y level) and quantity in the supply-demand diagram.
• Recall producer surplus measures gains to sellers: revenue minus minimum costs.
• Identify area below equilibrium price line, above supply curve, from origin to equilibrium quantity.
• Match this triangular area to labels, where Y-Z fits the description.

Why C is correct:

• Producer surplus is defined as the area above the supply curve and below the equilibrium price up to equilibrium quantity, matching area Y-Z.

Why the others are wrong:

• A: Area X-Y likely represents consumer surplus (above price, below demand curve).
• B: Area Y is too small, possibly just a point or unrelated segment.
• D: Area Y-Z duplicates C but may mislabel boundaries, excluding full surplus.

Final answer: C