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23. LDT Products, Inc., designs and sells flannel jackets. The company is willing to sell a mens flannel jacket for as littl
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Answer #1

The correct answer is 'Option B'.

LDT Products, Incorporated is willing to sell flannel jackets for as little as $45 and MK Outriggers is willing to sell a jacket for as little as $40. The market price of the same jacket is $57. The producer surplus shows the difference between the minimum amount at which a company is willing to sell its product and the price it actually receives. So, the producer surplus of LDT Products Incorporated company is ($57 - $45) which equals $12 whereas the producer surplus of MK Outriggers is ($57 - $40) which equals $17. The total producer surplus of the two firms is the sum of the producer surplus of the two individual firms. So, the total producer surplus is $12 + $17 = $29.

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