Table 7-13
The numbers reveal the opportunity costs of providing 10 piano lessons of equal quality.

-Refer to Table 7-13. The equilibrium market price for 10 piano lessons is $300. What is the total producer surplus in the market?

Question

Table 7-13
The numbers reveal the opportunity costs of providing 10 piano lessons of equal quality.
 
-Refer to Table 7-13. The equilibrium market price for 10 piano lessons is $300. What is the total producer surplus in the market?

Quizplus · Accepted Answer

The producer surplus is the area above the supply curve and below the equilibrium price. From the table, we can see that at a price of $300, the quantity supplied is 14 piano lessons. Therefore, the producer surplus is (14-10) x ($300 - $75) / 2 = $150. Option B is the correct answer.

Table 7-13 The Numbers Reveal the Opportunity Costs of Providing 10 Piano