# Econ

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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

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