Homework SourseSee Hint The women in the table above all build bicycles Usi
See Hint
The women in the table above all build bicycles. Using the data in the table, calculate total producer surplus for Faith, Paige, and Alexa if the price to build bicycles is $20 per hour.
| Seller | Willingness to sell |
| Faith | $27 |
| Paige | $14 |
| Alexa | $10 |
Solution
Producers surplus is the profit earned by the producer. In other words PS is how much extra the producer gets over their production cost.
PS = Willingness to sell - Production Cost.
For Faith, PS is 27 - 20 = 7.
PS of Paige is 14 - 20 = - 6.
PS of Alexa is 10 - 20 = - 10.
Total PS = 7 - 6 - 10 = - 9.
