The Price of a Hat Is $100

question 21

Multiple Choice

The price of a hat is $100. Willie can produce a hat at a marginal cost of $130, Waylon can produce at a marginal cost of $100, and Merle can produce at a marginal cost of $85. Which of the following statements is correct?

• A) The sum of producer surplus is $15.
• B) The sum of producer surplus is $30.
• C) All three of these sellers will gain producer surplus from selling a hat.
• D) Willie's producer surplus is $30.
• E) The sum of producer surplus is $45.

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Definitions:

Utility

The total satisfaction or benefit derived from consuming a product or service.

Marketing

The activity of producing, conveying, distributing, and trading goods and services that are valuable to consumers, clients, allies, and the broader community.

Benefits

Advantages or positive outcomes that satisfy the needs or wants of consumers or stakeholders.

Redbox

A company that rents DVDs, Blu-ray discs, and video games through self-service kiosks located at high-traffic shopping locations.