9. Unique Flowers is the only florist in Wales. When the firm maximizes profit, is theoutcome efficient?P, Cost[S/bouquet]170MC65D10110Quantity [#of bouquets]Market for BouquetsUse the diagram to answer the questions below:(1) Calculate the dollar value of consumer surplus, CS =(2) Calculate the dollar value of producer surplus, PS =(3) Is the outcome efficient?(Hint: Please work out the following steps in your notes to be able to answer theabove questions. Draw the MR curve and labelMR. Draw a point at the firm'sprofit maximizing output and price and label it, EM. Draw a shape to visualize theconsumer surplus and label it, CS. Draw a shape to show the producer surplus andlabel it, PS)Select 3 correct answer(s)(1) CS = $3412.5(1) CS = $750(2) PS = $1,650(2) PS = $0(3) efficient(3) inefficient

Consumer surplus and producer surplus total is called total surplus or welfare of society.

Answered: Unique Flowers is the only florist in…

Unique Flowers is the only florist in Wales. When the firm maximizes profit, is the outcome efficient? P. Cost [Sbouquet] 170 MC 65

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter11: Profit Maximization

Section: Chapter Questions

Problem 11.1P

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Question

Unique Flowers is the only florist in Wales. When the firm maximizes profit, is the
outcome efficient?
P, Cost
[S/bouquet]
170
MC
65
D
10
110
Quantity [#
of bouquets]
Market for Bouquets
Use the diagram to answer the questions below:
(1) Calculate the dollar value of consumer surplus, CS =
(2) Calculate the dollar value of producer surplus, PS =
(3) Is the outcome efficient?
(Hint: Please work out the following steps in your notes to be able to answer the
above questions. Draw the MR curve and label
MR. Draw a point at the firm's
profit maximizing output and price and label it, EM. Draw a shape to visualize the
consumer surplus and label it, CS. Draw a shape to show the producer surplus and
label it, PS)
Select 3 correct answer(s)
(1) CS = $3412.5
(1) CS = $750
(2) PS = $1,650
(2) PS = $0
(3) efficient
(3) inefficient

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