Question

Use the table below to answer the following question.

Units	Market Price	Minimum Acceptable Price
1	$8	$ 2
2	8	4
3	8	6
4	8	8
5	8	10
6	8	14

What is the value of producer surplus in the table above?

$44

$6

$12

$54

Answer 1

Ans:

value of producer surplus​ = $12

Producer Surplus is the difference between the amount producer of a good receives and the minimum amount producer is willing to accept for the good.

value of producer surplus​ = ($8-$2) * 1 + ($8-$4) * 2 + ($8 - $6) * 3 + ($8-$8) + ($8-$10) + ($8-$14)

= $6 + $8 + $6 - $2 - $6

= $20 - $8

= $12