Question

Alejandro Scoobertini owns a store specializing in soccer jerseys. In 2012, he purchased $150,000 worth of jerseys from manufacturers, employed one worker for $40,000, purchased $20,000 worth of supplies from an office supply store, and sold jerseys for $280,000. Based on this information, what was the value added (producer surplus) at Alejandro's store in 2012

Answer 1

$70,000

Step-by-step explanation:

Producer surplus is the difference between the price of a good and the least price the seller is willing to sell the product

Producer surplus = price – least price the seller is willing to accept

least price =cost of production = 150,000 + 40,000 + 20,000 = 210,000

280,000 - 210,000 = 70,000