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Caroline Sharpens Knives in Her Spare Time for Extra Income

Question 1

Multiple Choice

Caroline sharpens knives in her spare time for extra income.Buyers of her service are willing to pay $2.95 per knife for as many knives as Caroline is willing to sharpen.On a particular day,she is willing to sharpen the first knife for $2.00,the second knife for $2.25,the third knife for $2.75,and the fourth knife for $3.50.Assume Caroline is rational in deciding how many knives to sharpen.Her producer surplus is


A) $0.95.
B) $1.15.
C) $1.30.
D) $1.85.

Correct Answer:

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