The marginal cost of producing an oil painting is $1,000.The painting sold for $1,500.How much producer surplus did the painter receive?

Question

Quizplus · Accepted Answer

Producer surplus is the difference between the price at which a producer is willing to sell a good and the actual price they receive. In this case, the producer was willing to sell the oil painting for at least the marginal cost of $1,000, but actually received $1,500. Therefore, the producer surplus is $500.

The Marginal Cost of Producing an Oil Painting Is $1,000