Table 4-12

-Refer to Table 4-12. The equations above describe the demand and supply for Bubba's Fried Jellybeans. The equilibrium price and quantity for Bubba's Fried Jellybeans are $40 and 5 thousand units. What is the value of producer surplus?

Question

Table 4-12
 
-Refer to Table 4-12. The equations above describe the demand and supply for Bubba's Fried Jellybeans. The equilibrium price and quantity for Bubba's Fried Jellybeans are $40 and 5 thousand units. What is the value of producer surplus?

Quizplus · Accepted Answer

Producer surplus is calculated as the area above the supply curve and below the equilibrium price. With a price of $40 and equilibrium quantity of 5 thousand units, the producer surplus is (1/2) * (40 - 0) * 5 = $12.5 thousand.

Table 4-12 -Refer to Table 4-12. the Equations Above Describe the Demand