The supply function of a commodity is $P = x^3+2x+18$. When 4 units of commodity are sold, then producer surplus is:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → 208 **
Supply function: $P = x^{3} + 2x + 18$
Producer surplus at $x=4$:
$PS = xP(x) - \displaystyle \int_{0}^{x} P(t)\,dt$
Compute $P(4)$:
$P(4)=4^{3}+2\cdot 4+18=64+8+18=90$
Revenue at 4 units:
$4 \times 90 = 360$
Compute the integral:
$\displaystyle \int_{0}^{4}(t^{3}+2t+18)\,dt$
$= \left[\frac{t^{4}}{4} + t^{2} + 18t\right]_{0}^{4}$
Substitute $4$:
$\frac{4^{4}}{4}+4^{2}+18\cdot 4 = 64 + 16 + 72 = 152$
Producer surplus:
$PS = 360 - 152 = 208$
Producer surplus = 208