Producer Surplus as Triangular Area After Demand Shift

Steps:

• From the diagram, the new equilibrium at $12 corresponds to quantity of 120 units.
• The supply curve is linear from the origin to the initial equilibrium (100 units at $10).
• Producer surplus equals the area of the triangle above supply and below $12 up to 120 units.
• Compute area: (1/2) × 120 × 12 = 720.

Why B is correct:

• Producer surplus is the triangular area between the supply curve, the price axis, and the equilibrium price line, given by (1/2) × equilibrium quantity × equilibrium price for a linear supply from origin.

Why the others are wrong:

• A: Represents initial producer surplus of (1/2) × 100 × 10 = 500.
• C: Arises from doubling the initial surplus or using incorrect quantity like 200.
• D: Equals full rectangle of 120 × 12 = 1440, ignoring the triangular shape above supply.

Final answer: B