Micro Economics For Today
10th Edition
ISBN: 9781337613064
Author: Tucker, Irvin B.
Publisher: Cengage,
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Chapter 3.A, Problem 10SQ
To determine
The
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Suppose that last year the equilibrium price and the quantity of good X were $10 and 5 million pounds. Because of strong
demand this year, the equilibrium price and the quantity of good X are $12 and 7 million pounds, respectively. Assuming
that the supply curve of good X is linear, what happened to producer surplus in the market?
A
B
Producer surplus increased from $12.5 million to $49 million.
Producer surplus increased from $12.5 million to $24.5 million.
Producer surplus increased from $3 million to $7 million.
Producer surplus increased from $4.2 million to $5.6 million.
C
D
The local weather treatment facility, a price taker, is able to supply the first gallon of water for $0.01. The second for $0.02. The third for $0.03 and so on. The current price of water is $0.06 per gallon. - choose each of the following that are correct
a. Producer surplus will rise if the market price increases to $0.07 per gallon
b. This water treatment facility will choose to produce seven gallons of water
c. The firm will enjoy higher producer surplus if it unilaterally raises prices
d. This water treatment facility will earn $0.15 in producer surplus
A. The demand curve for a product is D = -2p + 800 , where the demand is units , and p is the price in $ . When the price is $ 100 , calculate the consumer surplus . Also , show a graph that indicates the consumer surplus .
B. The supply curve for a product is S = 5p - 400 , where the supply is 5 units , and p is the price in $ . When the price is $ 200 , calculate the producer surplus . Also , show a graph that indicates the producer surplus
Chapter 3 Solutions
Micro Economics For Today
Ch. 3.7 - Prob. 1YTECh. 3.7 - Prob. 1GECh. 3.7 - Prob. 2GECh. 3.7 - Prob. 3GECh. 3.A - Prob. 1SQPCh. 3.A - Prob. 2SQPCh. 3.A - Prob. 3SQPCh. 3.A - Prob. 4SQPCh. 3.A - Prob. 1SQCh. 3.A - Prob. 2SQ
Ch. 3.A - Prob. 3SQCh. 3.A - Prob. 4SQCh. 3.A - Prob. 5SQCh. 3.A - Prob. 6SQCh. 3.A - Prob. 7SQCh. 3.A - Prob. 8SQCh. 3.A - Producer surplus measures the value between the...Ch. 3.A - Prob. 10SQCh. 3.A - Prob. 11SQCh. 3.A - Prob. 12SQCh. 3.A - Prob. 13SQCh. 3.A - Prob. 14SQCh. 3.A - Prob. 15SQCh. 3.A - Prob. 16SQCh. 3.A - Prob. 17SQCh. 3.A - Prob. 18SQCh. 3.A - Prob. 19SQCh. 3.A - Prob. 20SQCh. 3 - Prob. 1SQPCh. 3 - Prob. 2SQPCh. 3 - Prob. 3SQPCh. 3 - Prob. 4SQPCh. 3 - Prob. 5SQPCh. 3 - Prob. 6SQPCh. 3 - Prob. 7SQPCh. 3 - Prob. 8SQPCh. 3 - Prob. 9SQPCh. 3 - Prob. 10SQPCh. 3 - Prob. 11SQPCh. 3 - Prob. 12SQPCh. 3 - Prob. 1SQCh. 3 - Which of the following would not cause market...Ch. 3 - Prob. 3SQCh. 3 - Prob. 4SQCh. 3 - Prob. 5SQCh. 3 - Prob. 6SQCh. 3 - Prob. 7SQCh. 3 - Prob. 8SQCh. 3 - Prob. 9SQCh. 3 - Prob. 10SQCh. 3 - Prob. 11SQCh. 3 - Prob. 12SQCh. 3 - Prob. 13SQCh. 3 - Prob. 14SQCh. 3 - Prob. 15SQCh. 3 - Prob. 16SQCh. 3 - Prob. 17SQCh. 3 - Prob. 18SQCh. 3 - Prob. 19SQCh. 3 - Prob. 20SQCh. 3 - Prob. 21SQCh. 3 - Prob. 22SQCh. 3 - Prob. 23SQCh. 3 - Prob. 24SQCh. 3 - Prob. 25SQ
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- D Question 5 In the graph, producer surplus is equal to 10 D 6. $12 $30 $54 $60 Question 6arrow_forwardIf the market demand for a product shifts to the right (parallel to the first demand curve), which of the following is correct? A. producer surplus and consumer surplus both decrease. B. producer surplus increases, consumer surplus decreases C. producer surplus decreases, condumer surplus increases. D. producer surplus and consumer surplus both increasearrow_forwardSuppose that Nabisco is willing to sell its first packet of Oreos for $1, the second for $2, the third for $3, and the fourth for $4. If the price of Oreos is $2.50, what is the producer surplus? (Assume that Nabisco CANNOT sell partial packs of Oreos.)arrow_forward
- Supply W y Demand Using the graph above, at the equilibrium (where the supply and demand lines intersect) in this market, which area represents CONSUMER surplus? There is no consumer surplus. Area w O Area x+ y. Area w+ y.arrow_forwardWhen an economist refers to "an efficient allocation of resources," she typically means is maximized. Select one: a. consumer surplus, but not producer surplus b. producer surplus, but not consumer surplus C. the sum of consumer and producer surplus d. consumer surplus minus producer surplusarrow_forwardIf you sold 500 pounds of beef for $5 per pound when you usually sell it for $2 per pound. What is your total producer surplus?arrow_forward
- The consumer surplus for John is $10 and his maximum willingness to pay for the product is $30 What would have been the market price?arrow_forwardSuppose the demand for Pan de Sal rises. What happens to producer surplus in the market for Pan de Sal? What happens to producer surplus in the market for flour? Illustrate your answer with diagrams.arrow_forwardTable 1 P Qs Qd 0 5 1 2 2 20 8 14 8arrow_forward
- Calculate the change in producer surplus when the market price increases from $14 to $16 and the quantity supplied increases from 5,000 units to 6,000 units per month. Assume that the supply curve is linear. Producer surplus will nearest penny.) by $ (Round your answer to thearrow_forwardSuppose that the equations for supply and demand are given as follows: QD = 120 – 3p Qs = 30 At the equilibrium price and quantity, what is producer surplus? a. $450 b. 600 c. $900 d. $1200arrow_forward1. Market supply is described by Q = 2.6P, where Q is the quantity demanded and P is the price in dollars. Let the market equilibrium price be $3.2. What is the producer surplus?arrow_forward
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