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All right, we are doing number 32 from chapter 3.
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It is asking us, what is producer surplus? how is it illustrated on a demand and supply diagram? so let's start by drawing our handy little demand and supply diagram.
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A large.
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Okay.
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And price goes up here.
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Quantity goes up here.
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Or down here, here's our equilibrium point.
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So anytime a good or service is sold, it's sold for a given price.
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Determined by the market right there at the equilibrium point.
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And let's say the good we're examining is tvs and their price is $200.
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But there are going to be a bunch of firms that make tvs.
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And there might be one firm that makes tvs and is willing to sell it for 150...