Suppose that the demand curve for an advanced technology product for businesses is given P =10,000 - 4Q³ and supply is P = 2,000 + 4Q³. The producer surplus at the equilibrium price is ____. A) $6,000 B) $10 C) $70,000 D) $30,000

Question

Quizplus · Accepted Answer

Producer surplus is the difference between the price producers receive and the minimum price they are willing to accept. At equilibrium, the price is P = 6,000, and the quantity is Q = 10. The minimum price producers are willing to accept is P = 2,000 + 4Q³ = 2,000 + 4(10)³ = 42,000. Therefore, the producer surplus is P - (2,000 + 4Q³) = 6,000 - (2,000 + 4(10)³) = $70,000.

Suppose That the Demand Curve for an Advanced Technology Product