Suppose that Saudi Arabia can produce oil at $4 per barrel, Iran at $10 per barrel, and Canada at $25 per barrel. If the price of oil is $90 per barrel, what is total producer surplus per barrel for world suppliers?

Question

Quizplus · Accepted Answer

To find the total producer surplus, we need to calculate the difference between the price of oil and the cost of producing it for each country, and then add up those differences for all the countries.

For Saudi Arabia: $90 - $4 = $86
For Iran: $90 - $10 = $80
For Canada: $90 - $25 = $65

So the total producer surplus is:
$86 + $80 + $65 = $231

Therefore, the correct answer is C.

Suppose That Saudi Arabia Can Produce Oil at $4 Per