Question

James is willing to sell his ipod for $20, and the going price on ebay is $15. Given this information, what would be the producer surplus for James? a. $20 b. $15 c. $0 o d.$5 $5

Answer 1

c. $0

Step-by-step explanation:

Producer surplus is the difference between the amount a producer (in this case James) is willing to sell a product and the market price. In this case the market price is higher than the price James is willing to sell. Therefore the producer surplus is zero.

Answer 2

c. $0

Step-by-step explanation:

As the producer surplus is the difference between theminimum price the selles accept to sale and the market price of the good.

In this case the ipod is worth $15 while Jame's price is $20 Thus there is no surplus James mostly won't even sale his ipod.