The change in producer surplus in Vietnam is represented in

The change in producer surplus in Vietnam is represented in the graph by:

B

Vietnam Japan P\' 0 0 Figure 2.6. Gains from Trade in the Rice Market

Solution

The producer surplus is the area above the supply curve and below the price line.

Here the \'PV\' is the domestic price and \'PW\' is the world price, when the country opens the trade to Japan, increases the producer surplus and has decreased the consumer surplus and it has shown by the graph A(FIRST GRAPH FROM LEFT).

There is excess supply in the market that is quantity supplied is greater than quantity demanded.