Suppose you're willing to tutor a student for $10 an hour. The student pays you $15 an hour. What is your producer surplus?
A) $15 an hour
B) $5 an hour
C) $10 an hour
D) $25 an hour
E) More than $25 an hour

Question

Quizplus · Accepted Answer

Producer surplus is the difference between what a producer is willing to accept for a good or service and what they actually receive. In this case, the tutor is willing to accept $10 an hour but is actually receiving $15 an hour. Therefore, the producer surplus is $5 an hour.

Suppose You're Willing to Tutor a Student for $10 an Hour