The supply curve for peanuts is upwardsloping At a price of

The supply curve for peanuts is upward-sloping. At a price of $2/pound, the quantity supplied of peanuts is 100 pounds. If the price of peanuts increases to $3/pound, producer surplus will:

Solution

Answer is Increase more than $ 100.

Explanation:

Original price : $2

Revised price: $ 3.

Change in price: $ 1.00 per unit. (hence, producer surplus is increased by 1.00 per unit)

However, upward sloping supply curve will increase the quantity supplied from 100 units to more with the increase in price.

Hence, the producer surplus will increase by more than $100.