Scenario 8-2
Roland mows Karla's lawn for $25.Roland's opportunity cost of mowing Karla's lawn is $20,and Karla's willingness to pay Roland to mow her lawn is $28.
-Refer to Scenario 8-2.If Karla hires Roland to mow her lawn,Roland's producer surplus is

Question

Quizplus · Accepted Answer

Producer surplus is the difference between the price at which a producer is willing to sell a good and the minimum price the producer is willing to accept for that good. In this case, Roland's minimum acceptable price is $20, but he is paid $25, resulting in a producer surplus of $5.

Scenario 8-2 Roland Mows Karla's Lawn for $25.Roland's Opportunity Cost of Mowing