Epic River Adventures offers whitewater rafting trips down the Rivière-Rouge in Quebec.It costs the firm $100 for the first raft trip per day,$120 for the second,$140 for the third,and $160 for the fourth.If the market price for a raft trip is $150,Epic River Adventures will offer _____ trips per day and will have producer surplus equal to _____ per day.
A) three;$90
B) three;$10
C) two;$220
D) four;$80

Question

Quizplus · Accepted Answer

Epic River Adventures will offer three trips per day because the cost of the fourth trip ($160) exceeds the market price ($150). The producer surplus is calculated as the difference between the market price and the cost for each trip: ($150-$100) + ($150-$120) + ($150-$140) = $50 + $30 + $10 = $90.

Epic River Adventures Offers Whitewater Rafting Trips Down the Rivière-Rouge