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iVinArrow [24]
4 years ago
8

Muddy's bakery and lily's sweet shop both sell cupcakes. the market price of one chocolate cupcake is $2.50. muddy's is willing

to sell a cupcake for as little as $1.65; lilly's is willing to sell a cupcake for as little as $1.75. what is the total producer surplus for the two firms
Business
2 answers:
torisob [31]4 years ago
7 0

Answer:

Muddy's bakery producer surplus = ($2.50 - $1.65) = $0.85

Lily's sweet shop producer surplus = ($2.50 - $1.75) = $0.75

Total producer surplus of the two firms = ($0.85 - $0.75) = $1.60

Explanation:

Producer surplus is the difference between the amounts the producer is willing to sell the goods for and the actual amount he/she receives when the trade is made.

defon4 years ago
6 0

The total producer surplus for the two firms is : $1.60

($2.50 - $1.65) + ($2.50 - $1.75) = $1.60

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