Table 7-11
The only four producers in a market have the following costs:
-Refer to Table 7-11. If Evan, Selena, Angie, and Kris sell the good, and the resulting producer surplus is $700, then the price must have been
A)$200.
B)$300.
C)$500.
D)$700.

Question

Table 7-11
The only four producers in a market have the following costs: 
-Refer to Table 7-11. If Evan, Selena, Angie, and Kris sell the good, and the resulting producer surplus is $700, then the price must have been
A)$200. 
B)$300. 
C)$500. 
D)$700.

Quizplus · Accepted Answer

The producer surplus is the difference between what producers are willing to accept and what they actually receive. If the total producer surplus is $700, and assuming each seller has a different cost, the price must have been $300 to result in that total surplus when considering the individual costs of Evan, Selena, Angie, and Kris.

Table 7-11 The Only Four Producers in a Market Have the Following