ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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The following graph plots a supply curve (orange line) for a group of recent graduates looking to sell used motor scooters. Each seller has only a single
used scooter available for sale. Think of each rectangular area beneath the supply curve as the "cost," or minimum price that each seller is willing to
accept. Assume that anyone who has a cost that equals the market price is willing to sell their used scooter.
PRICE (Dollars per used scooter)
420
360
280
210
140
70
0
Larry
U
хо
Megan
Raphael
Susan
0
Alex
3
QUANTITY (Used scooters)
ローロ
Becky
?
Region X (the purple shaded area) represents total producer surplus when the market price is equal to S
area) represents
when the market price
while Region Y (the grey shaded
In the following table, indicate which statements are true or false based on the information provided on the previous graph.
Statement
Producer surplus is smaller when the price is $245 than when it is $175.
Assuming each seller receives a positive surplus, Raphael will always receive less producer surplus than Susan.
True False
In order for Alex to earn a producer surplus of exactly $105 from selling a used scooter, the market price must be $
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Transcribed Image Text:The following graph plots a supply curve (orange line) for a group of recent graduates looking to sell used motor scooters. Each seller has only a single used scooter available for sale. Think of each rectangular area beneath the supply curve as the "cost," or minimum price that each seller is willing to accept. Assume that anyone who has a cost that equals the market price is willing to sell their used scooter. PRICE (Dollars per used scooter) 420 360 280 210 140 70 0 Larry U хо Megan Raphael Susan 0 Alex 3 QUANTITY (Used scooters) ローロ Becky ? Region X (the purple shaded area) represents total producer surplus when the market price is equal to S area) represents when the market price while Region Y (the grey shaded In the following table, indicate which statements are true or false based on the information provided on the previous graph. Statement Producer surplus is smaller when the price is $245 than when it is $175. Assuming each seller receives a positive surplus, Raphael will always receive less producer surplus than Susan. True False In order for Alex to earn a producer surplus of exactly $105 from selling a used scooter, the market price must be $
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