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

Economics Dec 23, 2020

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

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