Last year the average price for an airline ticket was $400, but the average price dropped to $350 this year due to a decrease in the demand for airplane travel. The accompanying table contains information on the supply of air travel.Airfare (price per ticket)Quantity supplied (millions of seats)$0 0$175 350$350 700$400 800$575 1,150 $750 1,500 Draw the supply curve and use it to calculate producer surplus last year and producer surplus this year. How did producer surplus change?

Answer: Given, Airfare (price per ticket) Quantity supplied (millions of seats) $0 0 $175 350…

Answered: Last year the average price for an…

Macroeconomics

13th Edition

ISBN:9781337617390

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter3: Supply And Demand: Theory

Section: Chapter Questions

Problem 1WNG

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Last year the average price for an airline ticket was $400, but the average price dropped to $350 this year due to a decrease in the demand for airplane travel. The accompanying table contains information on the supply of air travel.

Airfare (price per ticket) Quantity supplied (millions of seats)

$0     0

$175     350

$350     700

$400     800

$575     1,150

$750     1,500

Draw the supply curve and use it to calculate producer surplus last year and producer surplus this year. How did producer surplus change?

Airfare (price per ticket)	Quantity supplied (millions of seats)
$0	0
$175	350
$350	700
$400	800
$575	1,150
$750	1,500

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