Donald produces nails at a cost of $350 per ton.If he sells the nails for $500 per ton,his producer surplus is
A)$150.
B)$350.
C)$500.
D)$850.

Question

Quizplus · Accepted Answer

Producer surplus is the difference between the price a producer is willing to sell a good for and the price at which they actually sell it. In this case, Donald is willing to sell the nails for $350 per ton, but he is actually selling them for $500 per ton. Therefore, his producer surplus is $500 - $350 = $150.

Donald Produces Nails at a Cost of $350 Per Ton