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3 years ago

For the case of a perfectly price-discriminating monopolist (ppdm), producer surplus can be calculated as:

Business

1 answer:

Marrrta [24]3 years ago

8 0

Answer:

Explanation:

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

The Perfect Price Discrimination (1st degree price discrimination) will occur when an organization charges a different price for every unit consumed.

Producer surplus is formally given as PS = TR( q ppdm ) 0 q ppdm MC(q)dq

Where TR is the Total Revenue

For total cost and the definite integral of marginal cost over the range of output, we find that PS = TR( q ppdm ) TC( q ppdm ).

That is the sum of the consumer surplus and producer surplus is the total gains from trade.

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Second step find the sales associate's commission

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