Question

(figure: equilibrium in the market for mechanical pencils) consider the figure equilibrium in the market for mechanical pencils. at the equilibrium price, the producer surplus is equal to area:
graph: price per pencil (y-axis) with points a, b, d, e, f; supply curve from f to i (equilibrium), demand curve from a to i; points c, g, h, i. options: adi, ehf, aif, dif

Explanation:

Step1: Recall Producer Surplus Definition

Producer surplus is the area above the supply curve and below the equilibrium price, up to the equilibrium quantity. The supply curve starts at \( F \), the equilibrium point is \( I \), and the equilibrium price is at the level of \( D \) (since the vertical line from \( I \) meets the price axis at \( D \)).

Step2: Identify the Area

The supply curve is from \( F \) to \( I \). The equilibrium price is the price at \( D \), so the producer surplus is the area between the supply curve (\( F \) to \( I \)), the price axis from \( F \) to \( D \), and the horizontal line from \( D \) to \( I \). This forms a triangle (or a region) with vertices at \( D \), \( I \), and \( F \), so the area is \( DIF \).

Answer:

D. DIF