Mister Jones was selling his house.The asking price was $220,000,and Jones decided he would take no less than $200,000.After some negotiation,Mister Smith purchased the house for $205,000.Jones' producer surplus is

Question

Quizplus · Accepted Answer

Producer surplus is the difference between the lowest price a seller is willing to accept and the price they actually receive. Jones was willing to accept $200,000 and received $205,000, so his producer surplus is $5,000.

Mister Jones Was Selling His House