Question

Global Reach Corp. is a public company whose shares are currently trading in the market at $150 each. The company manufactures smartphones at the cost of $300 per unit and sells them in the market for $500 each. What is the company's producer surplus?

Answer 1

The company's producer surplus is $200 per unit

Step-by-step explanation:

Producer surplus: The amount which shows a difference between the selling value or market price and the cost price. The difference in the price is a producer surplus

In mathematically,

Producer surplus = Selling price or Market price - cost price

= $500 per unit - $300 per unit

= $200 per unit.