Table: Barrels of Oil $$\begin{array} { l c }
\hline & \begin{array} { c }
\text { Minimum willingness to sell } \
\text { a single barrel of oil }
\end{array} \
\hline \text { Country } & \$ 32.00 \
\text { Country A } & 16.00 \
\text { Country C } & 17.25 \
\text { Country D } & 56.99 \
\hline
\end{array}$$ 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 $$\begin{array} { l c } 
\hline & \begin{array} { c } 
\text { Minimum willingness to sell } \
\text { a single barrel of oil }
\end{array} \
\hline \text { Country } & \$ 32.00 \
\text { Country A } & 16.00 \
\text { Country C } & 17.25 \
\text { Country D } & 56.99 \
\hline
\end{array}$$ 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 calculated as the market price minus the minimum willingness to sell. For each country: Country: $51 - $32 = $19, Country A: $51 - $16 = $35, Country C: $51 - $17.25 = $33.75, Country D: $51 - $56.99 = $0 (since they won't sell at a loss). Total producer surplus = $19 + $35 + $33.75 = $87.75.

Table: Barrels of Oil Refer to the Table