Posted by **Shawn** on Thursday, February 15, 2007 at 12:55am.

At Nick's Bakery, the cost to make his homemade chocolate cake is $3 per cake. He sells three and

receives a total of $21 worth of producer surplus. Nick must be selling his cakes for

a. $2 each.

b. $7 each.

c. $8 each.

d. $10 each.

i can't figure this question out.

Producer surplus is price (P) less the minimum price the producer would be willing to sell ($3). So you know

3*P - $9 = 21. Ergo, P=$10.

Note: this assumes the $3 cost includes the amount Nick pays himself for his labor

## Answer This Question

## Related Questions

- Microeconomics [Urgent!] - I have an exam tomorrow and I really need to know how...
- calculus - You operate a bakery. You buy cakes from a supplier who charges you $...
- Fractionsss - Thirty-five slices of chocolate cake were sold at the bake sale. ...
- liberal arts - mary and tom jointly buy the vanilla-chocolate cake for $20. ...
- statistics - Four girls (say I, II, III and IV) are to rank 3 different types of...
- statistics - Four girls (say I, II, III and IV) are to rank 3 different types of...
- homework math - For every 20 cakes ordered from Barry's Bakery, 8 cakes ordered ...
- Algebra - Mary, Margaret, Ron and Nick are to share a sholarship. Ron receives 1...
- Maths - Please help me, Wendy went to a bakery to buy cakes and doughnuts. She ...
- geometry - Xenia is ordering a cake for her friend’s wedding. She knows that ...

More Related Questions