If an individual producer is willing to sell one unit of a good for $5 but finds he can sell it for $7.50,he has a producer surplus of
A) $12.50.
B) $7.50.
C) $5.
D) $6.25.
E) $2.50.

Question

Quizplus · Accepted Answer

Producer surplus is the difference between the price at which a producer is willing to sell a good and the price they actually receive. In this case, the producer surplus is $7.50 - $5 = $2.50.

If an Individual Producer Is Willing to Sell One Unit