You're an analyst for Royal Caribbean, a primary cruise line servicing the Caribbean Sea. In 2021, the price of a seven-day Caribbean cruise was $1,500 per ticket. A year later, as demand increased as COVID cases fell, the price per person rose to $2,000 per ticket. The accompanying table provides information on the supply of cruise travel.Cruise fare (price per ticket)Quantity supplied (number of tickets)$00$500750$1,0001,500$1,5002,250$2,0003,000$2,5003,750If the marginal cost of providing a ticket on a cruise for one traveler is $1,200, what was the change in producer surplus from 2021 to 2022?Question 12Answera.$1.7 millionb.$4.2 millionc.$0d.$2.1 million

To calculate the change in producer surplus from 2021 to 2022, we first need to understand what producer surplus is. Producer surplus is the difference between the amount a producer is paid and the minimum amount they are willing to accept to produce a good or service. It's represented by the area above the supply curve and below the price level.

In 2021, the price per ticket was $1,500 and the quantity supplied at this price was 2,250 tickets. The marginal cost of providing a ticket is$1,200. So, the producer surplus in 2021 was ($1,500 -$1,200) * 2,250 = $675,000.

In 2022, the price per ticket rose to $2,000 and the quantity supplied at this price was 3,000 tickets. So, the producer surplus in 2022 was ($2,000 - $1,200) * 3,000 =$2,400,000.

The change in producer surplus from 2021 to 2022 is the difference between the producer surplus in 2022 and the producer surplus in 2021. So, the change in producer surplus is $2,400,000 -$675,000 = $1,725,000.

So, the answer is a. $1.7 million.