The producer surplus of making and selling 10 chairs is found by
A) subtracting the marginal cost from the selling price for each chair and summing the differences for all 10 chairs.
B) adding the marginal cost and the price of all 10 chairs.
C) multiplying the selling price by 10.
D) subtracting from the total revenue the cost of producing one chair multiplied by 10.
E) None of the above answers is correct.

Question

Quizplus · Accepted Answer

Producer surplus is the difference between the selling price and the cost of production. To find the producer surplus of making and selling 10 chairs, we need to calculate the difference between the selling price and the marginal cost for each chair and then sum these differences for all 10 chairs. By doing so, we will get the total producer surplus for making and selling 10 chairs.

The Producer Surplus of Making and Selling 10 Chairs Is