Table 7-6
The following table represents the costs of five possible sellers.

-Refer to Table 7-6.If the market price is $1,000,the producer surplus in the market is

Question

Table 7-6
The following table represents the costs of five possible sellers.
 
-Refer to Table 7-6.If the market price is $1,000,the producer surplus in the market is

Quizplus · Accepted Answer

To determine producer surplus, we need to find the difference between the market price ($1,000) and the seller's cost. The seller with the lowest cost is willing to sell their product for $700, so their producer surplus is $300 ($1,000 - $700). The next seller is willing to sell their product for $750, so their producer surplus is $250 ($1,000 - $750). The other sellers are not willing to sell at the market price, so they have no producer surplus. To find the total producer surplus in the market, we add up the individual producer surpluses, which gives us $300 + $250 = $550. Therefore, the best choice is B, with a producer surplus of $550.

Table 7-6 The Following Table Represents the Costs of Five Possible Sellers