Question

if the market supply curve is p= 2+ X, where p and X respectively are price and supply, find the producers surplus when p=4​

Answer 1

Concept

Producer surplus is the difference between how much a person would be willing to accept for given quantity of a good versus how much they can receive by selling the good at the market price.

Given

p=2+X

To find

producer surplus?

Explanation

For p=4 the quantity supplied will be X=2 units.

If we want to calculate the producer surplus then it will be equal to

then we have to calculate the point where the supply curve touches the y axis that is at p=2

so the producer surplus will be =2*(4-2)

=2*2

=4

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