Principles of Economics (MindTap Course List)
8th Edition
ISBN: 9781305585126
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 7, Problem 2QR
To determine
How seller’s cost, producer’s surplus , and the supply curve are related.
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Explain how sellers’ costs, producer surplus, and thesupply curve are related.
How does the market equilibrium define what suppliers will stay in the market and what will leave the market? Explain based on the concept of producer surplus
Draw the Supply and Demand Curves for the following schedule:
Supply: There are six suppliers with cost of 12, seven suppliers with cost of 36, and seven suppliers with cost of 48.
Demand: There are 10 demanders with cost of 50, and 10 demanders with cost of 24.
Stripe the area of consumer surplus, and shade in the area of producer profit.
Identify the equilibrium price and quantity.
Chapter 7 Solutions
Principles of Economics (MindTap Course List)
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- Plot the supply and demand curve and find market equilibrium P & Q.arrow_forwardWhat could be possible problems of consumer behavior in a competitive market.arrow_forwardInteraction of demand and supply = Markets: Producer surplus Identify these areas on a diagram Calculate consumer/producer/community surplusarrow_forward
- If the area above the supply curve and under the market price = producer surplus; does the area below the supply curve = cost of production? I need to figure out where this part is on the diagram. Thanks!arrow_forwardGive three examples of goods with a vertical supply curve.arrow_forwardIn graph A below shows the market demand and supply in a competitive market, and graph B shows the cost curves of a representative firm in that industry. a. What are the market equilibrium price and quantity? Equilibrium price: $ Quantity traded:b. At equilibrium, what quantity is the firm producing? What is its total profit or loss? Leave no cells blank - be certain to enter "0" wherever required. Quantity: Total profit or loss $arrow_forward
- What is demand curve? What are three common approaches that marketers often use to determine the demand curve or consumer willingness to pay? What is the step-by-step new product development process?arrow_forwardCritically evaluate and explain each statement: An excess of price over marginal cost is the market’s way of signaling the need for more production of a good.arrow_forwardCould I have help with calculating values of consumer surplus producer cost and dead weight lostarrow_forward
- Producer surplus for a group of sellers The following graph shows the supply curve for a group of sellers in the U.S. market for smartphones (orange line). Each seller has only one smartphone to sell. The market price of a smartphone is shown by the black horizontal line at $90. Each rectangle on the graph corresponds to a particular seller in this market: blue (circle symbols) for Jake, green (triangle symbols) for Latasha, purple (diamond symbols) for Nick, tan (dash symbols) for Rosa, and orange (square symbols) for Tim. (Note: The name labels are to the right of the corresponding segment on the supply curve.) Use the rectangles to shade the areas representing producer surplus for each person who is willing to sell a smartphone at a market price of $90. (Note: If a person will not sell a smartphone at the market price, indicate this by leaving his or her rectangle in its original position on the palette.) Based on the information on the preceding graph, you can tell…arrow_forwardHurricane Dorian destroyed thousands of crawfish traps; explain and illustrate what would happen to the consumer surplus of crawfish men. What is the solutionarrow_forwardWhat is economic surplus defined as? A) The total revenue earned by a firm B) The difference between total revenue and total costs C) The total amount of money available for investment D) The value of goods produced in excess of demand Correct Answer: B) The difference between total revenue and total costsarrow_forward
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