Table: Barrels of Oil $$\begin{array} { l c }
\hline \text { Country } & \begin{array} { c }
\text { Minimum willingness to sell } \
\text { a single barrel of oil }
\end{array} \
\hline \text { Country X } & \$ 32.00 \
\text { Country Y } &16.00 \
\text { Country Z } & 17.25 \
\text { Country A } & 56.99 \
\hline
\end{array}$$ Refer to the table. What is the total amount of producer surplus (per barrel of oil) earned by all four producers if the market price per barrel of oil is $51?

Question

Table: Barrels of Oil $$\begin{array} { l c } 
\hline \text { Country } & \begin{array} { c } 
\text { Minimum willingness to sell } \
\text { a single barrel of oil }
\end{array} \
\hline \text { Country X } & \$ 32.00 \
\text { Country Y } &16.00 \
\text { Country Z } & 17.25 \
\text { Country A } & 56.99 \
\hline
\end{array}$$ Refer to the table. What is the total amount of producer surplus (per barrel of oil) earned by all four producers if the market price per barrel of oil is $51?

Quizplus · Accepted Answer

Producer surplus is the difference between the market price and the minimum willingness to sell. For Country X: $51 - $32 = $19, Country Y: $51 - $16 = $35, Country Z: $51 - $17.25 = $33.75, Country A: $51 - $56.99 = $0 (no surplus as the market price is lower). Total surplus = $19 + $35 + $33.75 = $87.75.

Table: Barrels of Oil Refer to the Table