Donald produces nails at a cost of $200 per tonne.If he sells the nails for $500 per tonne,what is his producer surplus

Question

Quizplus · Accepted Answer

Producer surplus is the difference between the price the producer receives for selling a good and the minimum price they would have been willing to accept for producing that good. In this case, Donald's minimum acceptable price is the cost of production, which is $200 per tonne. The selling price is $500 per tonne, so his producer surplus is $500 - $200 = $300 per tonne. Therefore, the best choice is B.

Donald Produces Nails at a Cost of $200 Per Tonne