Table 7-8
The numbers reveal the opportunity costs of providing 10 piano lessons of equal quality.

-Refer to Table 7-8.The equilibrium market price for 10 piano lessons is $400.What is the total producer surplus in the market?

Question

Table 7-8
The numbers reveal the opportunity costs of providing 10 piano lessons of equal quality.
 
-Refer to Table 7-8.The equilibrium market price for 10 piano lessons is $400.What is the total producer surplus in the market?

Quizplus · Accepted Answer

Total producer surplus is the area above the supply curve and below the equilibrium price. In this case, the supply curve is a straight line with a slope of 1, and the equilibrium price is $400. The total producer surplus is therefore a triangle with a base of 10 and a height of $400, which is $2000.

Table 7-8 The Numbers Reveal the Opportunity Costs of Providing 10 Piano