Asked by Valeria Martinez on Jun 18, 2024
Verified
If producing a soccer ball costs Jake $5, and he sells it for $40, his producer surplus is $35.
Producer Surplus
The difference between the amount sellers are willing to accept for a good or service and the actual amount they receive in the market.
Producing
The act of creating, manufacturing, or generating goods and services that can be offered in a market.
Sells
Engages in the act of offering goods or services in exchange for money or other compensation; a rephrased definition of 'Sellers.'
- Attain insight into the crucial aspects and methods involved in the calculation of producer surplus.
- Comprehend the principles of willingness to pay, actual payment, and surplus computation.
Verified Answer
TC
Tejaswini ChintapalliJun 20, 2024
Final Answer :
True
Explanation :
Producer surplus is the difference between what a producer is willing to accept for a good versus what they actually receive. In this case, Jake receives $40 for a soccer ball that costs him $5 to produce, so his producer surplus is $40 - $5 = $35.
Learning Objectives
- Attain insight into the crucial aspects and methods involved in the calculation of producer surplus.
- Comprehend the principles of willingness to pay, actual payment, and surplus computation.