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
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"Producer surplus = $ 12
It is said that Ahmed mows lawns for = $10, Boris mows lawns for = $20 and Chelsea mows lawns for = $30. Also, the going rate for mowing a lawn is $21,
Therefore, producer surplus is the amount that the person paying is the profit by paying amounts below the going rates to Ahmed and Boris,
So, the Producer surplus = (21-10) + (21-20) = 11 + 1
= $ 12
"
Explanation:
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