Question

CENGAGE MINDTAP Homework (Ch 07 5. Producer surplus for a group of sellers The following graph shows the supply curve for group of sellers in the us, market for tablets (orange ano). Each seller has only and tablet to sell The market price of tablets shown by the black ho l e at $150. Each rectangle on the graph corresponds to a particular seier this market: blue Corde symbols) for a green (triangle symbols) for Latasha, purple (samond symbols) for Nick, tan (dash symbols) for Ross, and orange (square symbols) for Tim. (Note The name labels are to the right of the corresponding segment on the supply curve). Use the r person w anges to shade the presenting producer surplus for each person who willing to sell a tablet at a market price of 150. Note: ho s a tablet at the market price indicate the by caving his or her rectangle in its original position on the palette) Search 0 ! e Poup

Answer 1

producers Susples is the difference between market price and produeen's willingness to sell. When market price is $150 . Nick, Lafash and Jake will be able to sell tablets becarise their cost of production is less than $150. price &/tablet) Tim 1 Rosa - market price 150 a b c Nick 120 Tale cartasha! GO M TK cake! I i. 307 o 1 2 3 4 5 Guantity 790 Jake's Pos= atdtk. = $(150 -30) × 1 = $ 120.. catasha's P.s= at bedte (ote). - $(150 - 60) (2-1) = $90 Nick's Pr s = e = $6.150:- 120(3-2). = $30

so you can tell that when market price is $ 150, 3 sellers will sell tablets. And, Total producers suplus is (120 +90 + 30) - $ 240 Now, market price decreases to $90. Price ($/teublet) A Itim Rosa I Nicki -market price ale catasha Jake; 1 2 3 4 5 Guantity At Price = $90, only catasha and Jake will be able to sell tablets, as their cost of production is less than $90. Jake's Pos= a +b = $(90-30)× 1 = $60 catasha's p.s= @= $(90-60(2-1) = $30 . When the market price & to $90, the number of sellers willing to sell a tablet decreases to 2 , and Total Pos decreases to $(60+30) = $90.