Table 7-8
The numbers reveal the opportunity costs of providing 10 piano lessons of equal quality.

-Refer to Table 7-8.The equilibrium market price for 10 piano lessons is $300.What is the total producer surplus in the market?

Question

Table 7-8
The numbers reveal the opportunity costs of providing 10 piano lessons of equal quality.
 
-Refer to Table 7-8.The equilibrium market price for 10 piano lessons is $300.What is the total producer surplus in the market?

Quizplus · Accepted Answer

The producer surplus in the market refers to the difference between the market price ($300) and the minimum price that producers are willing to accept to provide those 10 piano lessons in the market. Looking at the data in Table 7-8, the minimum price that any producer is willing to accept is $150. Thus, the producer surplus per lesson is $300 - $150 = $150. The total producer surplus in the market for 10 lessons is then $150 x 10 = $1,500. Therefore, B is the correct answer.

Table 7-8 The Numbers Reveal the Opportunity Costs of Providing 10 Piano