Homework answers / question archive / Sammy's Bakery and Presley's Sweetshop both sell cupcakes

Sammy's Bakery and Presley's Sweetshop both sell cupcakes

Economics

Share With

Sammy's Bakery and Presley's Sweetshop both sell cupcakes. The market price of one chocolate cupcake is $2.50. Sammy's is willing to sell a cupcake for as little as $1.65; Presley's is willing to sell a cupcake for as little as $1.75. What is the total producer surplus for the two firms?

a. $0.75

b. $1.60

c. $0.85

d. $2.50

e. $3.40