Table 3-2
Refer to Table 3-2. If the market price is $1,000, the producer surplus in the market is
A) $700.
B) $750.
C) $2,250.
D) $3,700.

Question

Table 3-2
 Refer to Table 3-2. If the market price is $1,000, the producer surplus in the market is
A) $700. 
B) $750. 
C) $2,250. 
D) $3,700.

Quizplus · Accepted Answer

Producer surplus is the difference between the price at which the producer is willing to sell the product and the actual market price. In this case, the producer is willing to sell the product at $1,500, but the market price is $1,000, so the producer surplus is $500 ($1,500 - $1,000). However, there are three producers in the market, so the total producer surplus in the market is $500 x 3 = $1,500. Therefore, option B is the correct answer.

Table 3-2 Refer to Table 3-2. If the Market Price Is