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Consumer & Producer Surplus · Question 55 of 70

Question 55

EasyOriginal question

The supply function is p=2x+5p = 2 x + 5, and the market price is ₹25. What is the producer surplus?

Options for question 55

Show the answer and explanation
CorrectNot quiteAnswer C

Correct answer: C

Explanation

  1. The market clears at x0=10x_0 = 10, p0=25p_0 = 25.

  2. PS=25×10−∫010(2x+5) dx=250−150=100PS = 25 \times 10 - \int_0^{10} (2 x + 5)\,dx = 250 - 150 = 100.

Worth noting

₹150 is the area under the supply line, the least the producers would accept, not the surplus above it.

Concept
Producer surplus for a straight-line supply
Typical time
60 s
Your time
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The rule this testsProducer surplus
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