If a producer is willing to receive at least $2 for a pen that she manufactures but she actually receives $7 for it. The producer surplus of the pen for that producer is
A) $2.
B) $5.
C) $9.
D) -$5.

Question

Quizplus · Accepted Answer

Producer Surplus = Price Received - Minimum Price Producer is Willing to Accept
Producer is willing to accept at least $2 but actually receives $7, so her producer surplus is $7 - $2 = $5. Therefore, the answer is B.

If a Producer Is Willing to Receive at Least $2