Donald produces nails at a cost of R200 per ton. If he sells the nails for R350 per ton, his producer sur-plus per ton is
R150.
R200.
R350.
R550.
R150.
Producer surplus is the difference between the price at which a producer is willing to sell a product and the price he actually sells it for. In this case, Donald is willing to sell the nails for R350 per ton, but his cost of production is only R200 per ton. Therefore, his producer surplus per ton is R350 - R200 = R150.