Question

What is the marginal social cost when the total number of rides is 30?

When the price is $70 a ride, what is each firm’s producer surplus? What is the market producer surplus?

Price (dollars per ride)	Quantity supplied (rides per week)
	Anmol	Ashu	Evan
100	30	25	20
90	25	20	15
80	20	15	10
70	15	10	5
60	10	5	0
50	5	0	0
40	0	0	0

Answer 1

Marginal Social Cost:

Total numbers of rides are 30 when the price per ride is $70. The MSC for any quantity is equal to the price at which that quantity is supplied. Hence when the total number of rides are 30, MSC is $70 per ride.

Producer's Surplus(PS)

When price is $70

Anmol's PS = At $70, Anmol supplies 15 rides. Anmol's PS equals the triangular area above the supply line and below the price line ABC. 1/2*(70-40)*15 = $225

Ashu PS = At $70, Ashu supplies 10 rides. Ashu's PS is area of ADE= 1/2*(70-50)*10 = $100

Evan PS = At $70, Evan supplies 5 rides. Evan's PS is area of AFG= 1/2*(70-60)*5 = $25

Market Surplus = $225 + $100 + $25 = $350.

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