QUESTION 49 200000 f the market price of a basketballis 35 a

QUESTION 49 2.00000 f the market price of a basketballis $35 and the ful producer surplus of I cost of producing it is $20, then a basketball producing firm gets O 1 basketball. O $35. o $20 o $15.

Solution

Answer : Option d is correct.

From the given information, we get that the production cost of a basketball = $20 ; a basketball market price = $35.

Total revenue = price * quantity = 35 * 1 = $35

Total cost = $20 (given)

Profit = Total revenue - Total cost = 35 - 20 = $15

Therefore, the firm who produces only 1 basketball gets the profit = $15 which is called producer surplus.