Demand, Supply and Markets > Basic Skills

Producer Surplus

Here are some practice problems that involve calculating producer surplus. You can check your work via the solution link below each one.

Question 1

A seller's individual willingness to accept for a good is given by the equation:

WTA = 100 + 5*Q

If the price of the good is $250, how many units would he sell and what would be his producer surplus?

Solution 1

Question 2

Suppose 20 identical sellers each have a willingness to accept curve given by the equation below, where i indicates seller i:

WTAi = 5 + 0.1*Qi

If the price of the product is $12, what is the producer surplus received by an individual seller? What is the total producer surplus received by the group?

Solution 2

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Peter J Wilcoxen, The Maxwell School, Syracuse University
Revised 08/17/2016