Let P represent price; let Qˢ represent 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

Let P represent price; let Qˢ represent 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.

Quizplus · Accepted Answer

Producer surplus is the difference between the price received by a supplier and the marginal cost of production. In this case, we can find the equilibrium price by setting the quantity supplied equal to the quantity demanded:

90 = 11P - 3P^2

Rewriting in standard form:

3P^2 - 11P + 90 = 0

Solving for P using the quadratic formula:

P = (11 ± √(11^2 - 4*3*90)) / (2*3)

P = 7.5 or 4.0

Since the supply curve equation is given as 11 - 3P, we know that the price must be 7.5 to produce 90 units, so we can calculate the producer surplus:

PS = (7.5 - 4.166667) * 90

PS = 1,350

Therefore, the statement is true and the answer is A.

Let P Represent Price; Let Qˢ Represent Quantity Supplied; and Assume