Question

Ahmed is willing to mow lawns for $10 each, boris is willing to mow lawns for $20 each, and chelsea is willing to mow lawns for $30 each. If the going rate for lawn mowing is $21, what is the total producer surplus received by the three of them

Answer 1

Answer:

Producer surplus = $ 12

Step-by-step explanation:

It is given that,

Ahmed mows lawns for = $10

Boris mows lawns for = $20

Chelsea mows lawns for = $30

The going rate for mowing a lawn is $21,

Hence we can define, producer surplus is the amount that the person paying is profiting by paying amounts below the going lawn mowing rates to Ahmed and Boris,

Producer surplus = (21-10) + (21-20) = 11 + 1 = $ 12