The table gives the demand and supply schedules for sandwiches. Quantity Quantity

step 1 All right, so given our table here, for A, we find the price at which quantity demanded is equal

The table gives the demand and supply schedules for...

The table gives the demand and supply schedules for sandwiches. $$\begin{array}{ccc} \text { Quantity } & \text { Quantity } \\ \text { Price } & \text { demanded } & \text { supplied } \\ \text { (pounds per sandwich) } & \text { (sandwiches per hour) } \\ \hline 0 & 400 & 0 \\ 1 & 350 & 50 \\ 2 & 300 & 100 \\ 3 & 250 & 150 \\ 4 & 200 & 200 \\ 5 & 150 & 250 \\ 6 & 100 & 300 \\ 7 & 50 & 350 \\ 8 & 0 & 400 \end{array}$$ a What is the maximum price that consumers are willing to pay for the 250 th sandwich? b What is the minimum price that producers are willing to accept for the 250 th sandwich? c Are 250 sandwiches a day less than or greater than the efficient quantity? d If the sandwich market is efficient, what is the consumer surplus? (Draw the graph.) e If the sandwich market is efficient, what is the producer surplus? (Draw the graph.) f. If sandwich makers produce 250 a day, what is the deadweight loss? (Draw the graph.)

The table gives the demand and supply schedules for sandwiches.
$$\begin{array}{ccc}
\text { Quantity } & \text { Quantity } \\
\text { Price } & \text { demanded } & \text { supplied } \\
\text { (pounds per sandwich) } & \text { (sandwiches per hour) } \\
\hline 0 & 400 & 0 \\
1 & 350 & 50 \\
2 & 300 & 100 \\
3 & 250 & 150 \\
4 & 200 & 200 \\
5 & 150 & 250 \\
6 & 100 & 300 \\
7 & 50 & 350 \\
8 & 0 & 400
\end{array}$$
a What is the maximum price that consumers are willing to pay for the 250 th sandwich?
b What is the minimum price that producers are willing to accept for the 250 th sandwich?
c Are 250 sandwiches a day less than or greater than the efficient quantity?
d If the sandwich market is efficient, what is the consumer surplus? (Draw the graph.)
e If the sandwich market is efficient, what is the producer surplus? (Draw the graph.)
f. If sandwich makers produce 250 a day, what is the deadweight loss? (Draw the graph.)

Key Concepts

Demand Schedule

A demand schedule is a table or graph that shows the relationship between the price of a good or service and the quantity of it that consumers are willing and able to purchase. It reflects the consumers’ willingness to pay at different price levels and is critical for understanding consumer behavior and calculating metrics like consumer surplus, particularly when assessing how much consumers value an additional unit of the good.

Supply Schedule

A supply schedule is a table or graph that illustrates the relationship between the price of a good or service and the quantity that producers are willing and able to offer for sale. It indicates the minimum price at which producers are prepared to supply each additional unit, and is essential for analyzing production decisions, calculating producer surplus, and determining market equilibrium.

Equilibrium and Efficient Quantity

The equilibrium in a market occurs where the demand and supply schedules intersect, meaning that the quantity demanded equals the quantity supplied. This equilibrium quantity represents an efficient allocation of resources, where the marginal benefit to consumers equals the marginal cost to producers. Any deviation from this price and quantity level leads to inefficiencies such as shortages, surpluses, or deadweight loss.

Consumer Surplus

Consumer surplus is the difference between what consumers are willing to pay for a good or service (as indicated by the demand curve) and what they actually pay (the market price). It is represented graphically as the area below the demand curve and above the market price, up to the quantity purchased. This concept helps assess the benefits to consumers in a market transaction.

Producer Surplus

Producer surplus is the difference between the market price received by producers and the minimum price at which they are willing to produce a good or service (as indicated by the supply curve). Graphically, it is shown as the area above the supply curve and below the market price, up to the quantity sold. Producer surplus serves as an indicator of the benefits that producers gain from engaging in market transactions.

Deadweight Loss

Deadweight loss refers to the loss of economic efficiency that occurs when the equilibrium outcome is not reached, typically due to market distortions or interventions that prevent the market from allocating resources optimally. It represents the net loss of total (consumer and producer) surplus and is graphically illustrated as the area between the supply and demand curves over the range of the underproduced or overproduced quantities.

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