Tom tunes pianos in his spare time for extra income. Buyers of his service are willing to pay $155 per tuning. One particular week, Tom is willing to tune the first piano for $120, the second piano for $125, the third piano for $140, and the fourth piano for $160. Assume Tom is rational in deciding how many pianos to tune. His producer surplus is

$80

Explanation:

Tom will only tune pianos if the buyers' willingness to pay ($155) is higher than the amount he is willing to receive for each job.

Since Tom would require $160 to tune the fourth piano, which is higher than $155, he will only tune three pianos.

His total producer surplus is given by the sum of each piano's producer surplus, which are then defined as the difference between the amount paid for the service and the amount at which Tom values his service:

His producer surplus is $80.

answer; normative economics;