Exploring Economics
8th Edition
ISBN: 9781544336329
Author: Robert L. Sexton
Publisher: SAGE Publications, Inc
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Chapter 7, Problem 4P
To determine
The effect of increased
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Can you help me with this please? If there is a surplus of goods in the market would that still lead to a producer surplus?
Producer surplus being defined as the amount a seller is paid for a good minus the sellers cost of providing it. 
What happens to total surplus when producer surplus decreases and consumer surplus increases?
If there is a price ceiling of $5, there is a direct transfer of surplus from producers to consumers. The producer surplus transferred to those students who are able to continue to get tutoring is, in numerals, $_____.
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- Consider a market for fountain pens. Suppose the ink (complement for fountain pens) becomes more expensive. What is going to happen to producer surplus on the fountain pens market? Producer surplus will increase Producer surplus will decrease Producer surplus will stay the same Change in producer surplus will be ambiguousarrow_forwardConsider a free market with demand equal to Q = 800 − 10P and supply equal to Q = 10P. What is the value of consumer surplus? What is the value of producer surplus?arrow_forwardRefer to the Figure below. Suppose the market price of a laptop is $600, and 3,000 laptops are sold at this price. What is the producer surplus?arrow_forward
- Calculate producer surplus based on a graphor table.arrow_forwardIf producers are willing to sell 20 cans of soda at a total price of 10 and a local restaurant offers to pay 16, then producer surplus is equal toarrow_forwardHow much is total producer surplus in this market at the equilibrium price?arrow_forward
- Define Consumer and Producer Surplus and illustrate them graphically.arrow_forwardIf the market demand for a product shifts to the right (parallel to the first demand curve), which of the following is correct? A. producer surplus and consumer surplus both decrease. B. producer surplus increases, consumer surplus decreases C. producer surplus decreases, condumer surplus increases. D. producer surplus and consumer surplus both increasearrow_forwardThe demand curve for cookies is downward sloping. When the price of cookies is $3.00, the quantity demanded is 100. If the price falls to $2.00 what happens to consumer surplus?arrow_forward
- Suppose the supply function for X good is expressed as Q X = - 20 + 4P x . If the price of Xgood increased from 8 AZN to 10 AZN how and how much producer surplus will changearrow_forwardThe market demand and supply equations for theme park in a city are given by P = 30 – 0.005QD and P = 10 + 0.005QS, where P is the price in dollars and QD is the quantity of theme-park tickets demanded and QS is the quantity of theme park ticket supplied. Given that the equilibrium price of theme park tickets is $20, equilibrium quantity of theme park tickets is 2000 and the consumer surplus is 10000 and producer surplus is 10000: Explain the implications of the welfare of consumers, producers and the society when the price of theme park ticket is fixed at $15. Support your answers with a graph of the theme park tickets market.arrow_forwardConsider a market with the equilibrium quantity = 100 and the equilibrium price = 50. Without further information on the market, can we answer the quantity that maximizes the total surplus? If we can, answer the quantity. If we cannot, answer “Cannot”.arrow_forward
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