Ask Question
4 March, 04:52

Calculate Producer Surplus if Reservation Price=20, Price=8, & Quantity=10.

A. 800 B. 1000 C. 60

+3
Answers (1)
  1. 4 March, 08:19
    0
    C. 60

    Explanation:

    Producer's Surplus means the value producer derives from selling goods. For example, if producer is willing to sell the product for a price 8 but consumers are willing to pay a higher price, let's say 20, then producer achieves a surplus of 12 per unit. Let's calculate the producer's surplus -

    As per question, Reservation Price (RP) = 20, Price (P) = 8, & Quantity (Q) = 10

    The formula for Producer Surplus (PS) is as follow:

    PS = 1/2 (RP - P) x Q

    = 1/2 (20-8) x 10 = 60
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Calculate Producer Surplus if Reservation Price=20, Price=8, & Quantity=10. A. 800 B. 1000 C. 60 ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers