John advertises his used car for $3,000 in the newspaper. He would be willing to sell his used car for as low as $2,000. He is offered $2,600 for it from a buyer and accepts it. In this trade, John receives

Question

Quizplus · Accepted Answer

Producer surplus is the difference between the price at which a producer is willing to sell a good and the actual price they receive. Thus, in this case, John's producer surplus is $600 ($2,600 selling price - $2,000 minimum price he was willing to accept). Therefore, the correct answer is C.

John Advertises His Used Car for $3,000 in the Newspaper