Options:
A. Judy's producer surplus is $270,000
B. Judy's producer surplus is $5000
C. Gary's Consumer surplus is $5000
D. Judy's consumer surplus is $30000.
Answer:
B. Judy's producer surplus is $5000
D. Judy's consumer surplus is $30000.
Explanation: Surplus is a term used to describe the amount spent in excess of the Actual worth of a given asset or a material, the asset or material can either for business, convenience or for leisure.
Producer surplus is the amount which a producer expected to be paid for the supply or production of a particular product and the amount received after supply.
JUDY'S PRODUCER SURPLUS= ACTUAL AMOUNT IT WAS SOLD-THE AMOUNT THE PRODUCER IS WILLING TO SELL
=$90,000-$85,000
=$5,000.
Consumer surplus is the difference between the amount a Consumer is willing to pay for a good or service and the actual amount paid.
CONSUMER SURPLUS= THE AMOUNT THE CONSUMER IS WILLING TO PAY- THE AMOUNT THE CONSUMER PAID
$150,000-$120,000
=$30,000.
