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What is the TOTAL producer surplus in the contact lens market?? I don't understand or know how to figure out the total producer surplus? PS- the graph and table reflect the contact lens market.

What is the TOTAL producer surplus in the contact lens market?? I don't understand or know how to figure out the total producer surplus? PS- the graph and table reflect the contact lens market.

Principles of Macroeconomics (MindTap Course List)
Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781305971509
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter7: Consumers, Producers, And The Efficiency Of Markets
Section: Chapter Questions
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What is the TOTAL producer surplus in the contact lens market?? I don't understand or know how to figure out the total producer surplus?

PS- the graph and table reflect the contact lens market. 

Julio Domestic Market: No Trade Sure, producer surplus is the difference between the price firms are willing and able to sell their contacts for and the actual price that they receive. No International Trade Vivan 240 - 200 - For example, in the contact lens market, producers would be willing to sell 40 boxes of contact lenses for $40 a box, but the market equilibrium price is $120. 160 - 120 - 80 - A producer willing to supply a set of contact lenses for $40 will therefore receive producer surplus of ($120 - $40 = $80) when they sell their product for $120. 40 - Vivan 0- 120 160 200 o Quantity Supplied - Quantity Demanded While we could figure this out for all producers and add up the results, there's an easier way using the graph. Domestic Market Price Quantity Supplied Quantity Demanded 240 Vivan 20 20 220 Graphically, producer surplus is the area from the market price ($120) down to the supply curve and over to the equilibrium quantity of 120. 40 40 200 60 60 180 Vivan 80 80 160 100 100 140 Got it! So what is total producer surplus in the contact lens market? 120 120 120 140 140 100 Julio 160 160 80 180 180 60 200 200 40 Enter a response then click Submit below 220 220 20 240 240
Transcribed Image Text:Julio Domestic Market: No Trade Sure, producer surplus is the difference between the price firms are willing and able to sell their contacts for and the actual price that they receive. No International Trade Vivan 240 - 200 - For example, in the contact lens market, producers would be willing to sell 40 boxes of contact lenses for $40 a box, but the market equilibrium price is $120. 160 - 120 - 80 - A producer willing to supply a set of contact lenses for $40 will therefore receive producer surplus of ($120 - $40 = $80) when they sell their product for $120. 40 - Vivan 0- 120 160 200 o Quantity Supplied - Quantity Demanded While we could figure this out for all producers and add up the results, there's an easier way using the graph. Domestic Market Price Quantity Supplied Quantity Demanded 240 Vivan 20 20 220 Graphically, producer surplus is the area from the market price ($120) down to the supply curve and over to the equilibrium quantity of 120. 40 40 200 60 60 180 Vivan 80 80 160 100 100 140 Got it! So what is total producer surplus in the contact lens market? 120 120 120 140 140 100 Julio 160 160 80 180 180 60 200 200 40 Enter a response then click Submit below 220 220 20 240 240
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