Let P represent price;let Q^Srepresent quantity supplied;and assume the equation of the supply curve is .If 90 units of the good are produced and sold,then producer surplus amounts to $1,350.

Question

Quizplus · Accepted Answer

To calculate producer surplus, we need to find the area between the supply curve and the price at which 90 units are sold. 
At QS1U1P1SS1S1P0S1U1P1, the price is $10. So, we can substitute P=10 into the supply curve equation:

QS1U1P1SS1S1P0S1U1P1 = 5 + 1*10 = $15

Therefore, at a price of $10, quantity supplied is $15. 
The area of the triangle between the supply curve and the price of $10 (where 90 units are sold) is: 
(1/2) * (90) * (15-10) = $225

So, at a price of $10, producer surplus is $225.

Since we are told that the total producer surplus is $1,350, we can assume that this is the sum of all the individual producer surpluses for each unit sold.

Therefore, we can divide $1,350 by 90 units to get the average producer surplus per unit: 
$1,350/90 = $15

This tells us that for every unit sold, the producer received $15 of surplus.

Since at a price of $10, producer surplus is $225 per unit, we can calculate how many units were sold at that price by dividing $225 by $15: 
$225/$15 = 15 units

Therefore, out of the total 90 units produced and sold, the first 15 were sold at a price of $10, and the remaining 75 were sold at a price higher than $10. This means that the producer surplus for the first 15 units sold was: 
15 units * $225/unit = $3,375

Since the total producer surplus was only $1,350, we know that the remaining 75 units must have been sold at a price less than $15 (the total surplus divided by the total units).

Therefore, the statement is true: if 90 units of the good are produced and sold, then producer surplus amounts to $1,350.

Let P Represent Price;let QS represent Quantity Supplied;and Assume the Equation

Let P Represent Price;let Q^Srepresent Quantity Supplied;and Assume the Equation