The supply function of a commodity is $P = x^3+2x+18$. When 4 units of commodity are sold, then producer surplus is: |
320 488 160 208 |
208 |
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 |