Scenario 8-1
Erin would be willing to pay as much as $100 per week to have her house cleaned. Ernesto's opportunity cost of cleaning Erin's house is $70 per week.
-Refer to Scenario 8-1. If Ernesto cleans Erin's house for $90, Ernesto's producer surplus is
A)$80.
B)$30.
C)$20.
D)$10.

Question

Quizplus · Accepted Answer

Ernesto's producer surplus is the difference between what he is paid ($90) and his opportunity cost ($70), which equals $20.

Scenario 8-1 Erin Would Be Willing to Pay as Much as $100