Figure 4.5.2
-Figure 4.5.2 shows marginal costs for Betsy's Butter business. If Betsy sells the third unit of butter for $6, what is her producer surplus on the 3rd unit?
A) $3
B) $6
C) $5
D) $4
E) $2

Question

Figure 4.5.2
-Figure 4.5.2 shows marginal costs for Betsy's Butter business. If Betsy sells the third unit of butter for $6, what is her producer surplus on the 3rd unit?
A) $3 
B) $6 
C) $5 
D) $4 
E) $2

Quizplus · Accepted Answer

Producer surplus is the difference between the selling price and the marginal cost. If the third unit is sold for $6 and the marginal cost is $4, the producer surplus is $6 - $4 = $2.

Figure 4.5.2 -Figure 4.5.2 Shows Marginal Costs for Betsy's Butter Business. If