Respuesta :
If Nick generates a $17.50 producer surplus, the price per chocolate cake will be $7.50.
$4 each cake, multiplied by five, equals $20 as the minimum amount to accept.
$14.50 is the producer surplus
$20+
$17.50= $37.50 Price A price of $37.50 gets you 5 chocolate cakes, making each one $7.50.
The discrepancy between what a producer receives and the least price they would be willing to take for the good is what is referred to as producer surplus.
A person's ability to profit from selling a good at market value is measured by their producer surplus. The profit to the producer for selling the good on the market is the difference or surplus amount.
Market pricing above the lowest price producers would typically be ready to pay for their products result in a producer surplus. The law of Walras might be relevant here.
Learn more about producer surplus here
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