Producer Surplus in Market Equilibrium

Steps:

• Locate equilibrium where supply and demand curves intersect, determining price P and quantity Q.
• Producer surplus measures gains to sellers: area above supply curve, below P, from 0 to Q.
• In the diagram, this triangular area is labeled T.
• Thus, select the option matching area T.

Why B is correct:

• Producer surplus is defined as revenue received minus minimum willingness to sell, equaling area T per standard supply-demand graph.

Why the others are wrong:

• A: S + T represents total revenue (price times quantity), not just surplus.
• C: U is typically consumer surplus (above price, below demand).
• D: U + V is total surplus (consumer plus producer).

Final answer: B