Producer Surplus: To determine the initial producer surplus, we need to locate the region between the supply curve and the equilibrium price line. At the equilibrium price of around $35.71, the amount that would be supplied can be determined, the quantity supplied would be: Q=50+2(35.71)= 121.43 In order to accurately calculate the initial producer surplus, it is imperative that we calculate the area of the triangle formed by the intersection of the supply curve and the equilibrium quantity. Failure to do so may result in inaccurate assessments and flawed conclusions. Initial Producer Surplus = (1/2) x (35.71-0) x (121.43-50) = $1,767.86 Based on our calculations of the area of the triangle formed by the intersection of the supply curve and the equilibrium quantity, we can estimate that the initial producer surplus amounts to around $1,767.86.

Producer Surplus: To determine the initial producer surplus, we need to locate the region between the supply curve and the equilibrium price line. At the equilibrium price of around $35.71, the amount that would be supplied can be determined, the quantity supplied would be: Q=50+2(35.71)= 121.43 In order to accurately calculate the initial producer surplus, it is imperative that we calculate the area of the triangle formed by the intersection of the supply curve and the equilibrium quantity. Failure to do so may result in inaccurate assessments and flawed conclusions. Initial Producer Surplus = (1/2) x (35.71-0) x (121.43-50) = $1,767.86 Based on our calculations of the area of the triangle formed by the intersection of the supply curve and the equilibrium quantity, we can estimate that the initial producer surplus amounts to around $1,767.86.

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter4: Supply And Demand: An Initial Look

Section: Chapter Questions

Problem 8TY

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