CENGAGE MINDTAP Chapter 07 Homework 7. Producer surplus for an individual and a market Suppose the market for macaroons is perfectly competitive, so sellers take the market price as given. Lorenzo manages a bakery that offers macaroons for sale. The following graph plots Lorenzo's weekly supply curve (orange line). Point A represents a point along his supply curve. The price of macaroons is $2.25 per macaroon, which is given by the black horizontal line. Lorenzo's Weekly Supply Price (Dollars per macaroon) 4.50 4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0 0 1 2 3 4 5 6 7 8 9 10 Quantity (Macaroons per week) Using the previous graph, you can determine that Lorenzo is willing to supply his 6th weekly macaroon for $. Since he receives $2.25 per macaroon, the producer surplus earned from supplying the 6th macaroon is $. Suppose the price of macaroons were to rise to $3.00 per macaroon. At this higher price, Lorenzo would receive a producer surplus of $ from the 6th macaroon he sells.
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- From the graph, locate the quantity of 6 macaroons on the x-axis. - Move vertically up to the supply curve (orange line) to find the corresponding price on the y-axis. - The price Lorenzo is willing to supply his 6th macaroon for is $1.50. Show more…
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Figure 8 shows a supply curve for a commodity. It gives the relationship between the selling price of the commodity and the quantity that producers will manufacture. At a higher selling price, a greater quantity will be produced. Therefore, the curve is increasing. If $(A, B)$ is a point on the curve. then, to stimulate the production of $A$ units of the commodity, the price per unit must be $B$ dollars. Of course, some producers will be willing to produce the commodity even with a lower selling price. since everyone receives the same price in an open efficient economy, most producers are receiving more than their minimal required price. The excess is called the producers" surplus. Using an argument analogous to that of the consumers" surplus, we can show that the total producers' surplus when the price is $B$ is the area of the shaded region in Fig. $8 .$ Find the producers' surplus for each of the following supply curves at the given sales level, $x$. (Check your book to see figure) $$p=\frac{x^{2}}{9}+1 ; x=3$$
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Figure 8 shows a supply curve for a commodity. It gives the relationship between the selling price of the commodity and the quantity that producers will manufacture. At a higher selling price, a greater quantity will be produced. Therefore, the curve is increasing. If $(A, B)$ is a point on the curve. then, to stimulate the production of $A$ units of the commodity, the price per unit must be $B$ dollars. Of course, some producers will be willing to produce the commodity even with a lower selling price. since everyone receives the same price in an open efficient economy, most producers are receiving more than their minimal required price. The excess is called the producers" surplus. Using an argument analogous to that of the consumers" surplus, we can show that the total producers' surplus when the price is $B$ is the area of the shaded region in Fig. $8 .$ Find the producers' surplus for each of the following supply curves at the given sales level, $x$. (Check your book to see figure) $$p=\frac{x}{2}+7 ; x=10$$
Calculate the producers' surplus for the supply equation at the indicated unit price p = 10 + 2q; (Round your answer to the nearest cent.)
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