Let P represent price; let QS represent quantity supplied; and assume the equation of the supply curve is P = 15 + (1/3) Q^S . If 90 units of the good are produced and sold, then producer surplus amounts to $1,350.

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Producer surplus is the difference between the price producers receive for a good and the minimum price they are willing to accept. In this case, the supply curve is P = 15 + (1/3) Q^S, which means that the minimum price producers are willing to accept is 15 + (1/3) Q^S. If 90 units of the good are produced and sold, then the price producers receive is P = 15 + (1/3) (90) = 45. Therefore, producer surplus is 45 - (15 + (1/3) (90)) = 1,350.

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