George produces cupcakes.His production cost is $10 per dozen.He sells the cupcakes for $16 per dozen.His producer surplus per dozen cupcakes is
A)$6.
B)$10.
C)$16.
D)$26.

Question

Quizplus · Accepted Answer

Producer surplus is the difference between the price a producer receives for a good and the marginal cost of producing that good. In this case, George's marginal cost is $10 per dozen, and he sells the cupcakes for $16 per dozen. Therefore, his producer surplus is $16 - $10 = $6 per dozen.

George Produces Cupcakes