Question

7. Producer surplus for an individual and a market Suppose the market for cheesecake is a perfectly competitive market-that is, sellers take the market price as given. Manuel owns a restaurant where he sells cheesecake. The following graph shows Manuel's weekly supply curve, represented by the orange line. Point A represents a point along his supply curve. The price of cheesecake is $3.00 per slice, as shown by the horizontal black line. Manuel's Weekly Supply 5.00 4.00 3.50 3.50 3.00 Price 2.50 2.00 Supply 1.50 1.00 0.50 02 46 1012 14 1 8 20 QUANTITY (Silices of cheesecake) From the previous graph, you can tell that Manuel is willing to supply his 4th slice of cheesecake for s per slice, the producer surplus he gains from supplying the 4th slice of cheesecake is s each week. Since he receives $3.00

Answer 1

Please Kindly help with Thumbs up for this answer. If any doubts feel free to query. Thank you