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

-Refer to Table 7-6.If the market price is $900,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 $900,the producer surplus in the market is

Quizplus · Accepted Answer

The producer surplus is the difference between the market price and the seller's cost. For Seller A, the cost is $500, so the producer surplus is $900 - $500 = $400. For Seller B, the cost is $600, so the producer surplus is $900 - $600 = $300. For Seller C, the cost is $700, so the producer surplus is $900 - $700 = $200. For Seller D, the cost is $800, so the producer surplus is $900 - $800 = $100. For Seller E, the cost is $1,000, so there is no producer surplus. The highest producer surplus is for Seller A, but they are not an option. The next highest is for Seller B, who has a producer surplus of $300. Therefore, the best choice is Seller B.

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