Question

Has 2 graphs and questions. thank you for your

5. 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 laptops (orange line). Each seller has only one laptop to sell. The market price of a laptop is shown by the black horizontal line at $105. Each rectangle on the graph corresponds to a particular seller in this market: blue (circle symbols) for lake, 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 laptop at a market price of $105. (Note: If a person will not sell a laptop at the market price, indicate this by leaving his or her rectangle in its original position on the palette.) PRICE (Dollars per atop) Market Price Lalatha QUANTITY (Laptops)

Answer 1

The producer surplus is the difference between the market price and the minimum price at which the seller is ready to sell the product.

So, for Jake, the producer surplus is the region which is above the supply curve and is between the $15 line and the $105 price line. So, the producer surplus for Jake will be $105 - $15 = $90.

For Latasha, the producer surplus is the region which is above the supply curve and is between the $45 line and the $105 price line. So, the producer surplus for Latasha will be $105 - $45 = $60

For Nick, the producer surplus is the region which is above the supply curve and is between the $75 line and the $105 price line. So, the producer surplus for Nick will be $105 - $75 = $30

Rosa and Tim will not sell their laptops because the minimum price at which they are ready to sell the laptop is higher than the current market price, which is $105 per laptop.

So the total producer surplus at $105 market price = $90 + $60 + $30 = $180.

Based on the information on the preceding graph, you can tell that Jake, Latasha and Nick will sell laptops at the given market price, and total producer surplus in this market will be $180.

Now, if the market price increases to $165 per laptop,

So, for Jake, the producer surplus is the region which is above the supply curve and is between the $15 line and the $165 price line. So, the producer surplus for Jake will be $165 - $15 = $150.

For Latasha, the producer surplus is the region which is above the supply curve and is between the $45 line and the $165 price line. So, the producer surplus for Latasha will be $165 - $45 = $120

For Nick, the producer surplus is the region which is above the supply curve and is between the $75 line and the $165 price line. So, the producer surplus for Nick will be $165 - $75 = $90

For Rosa, the producer surplus is the region which is above the supply curve and is between the $135 line and the $165 price line. So, the producer surplus for Nick will be $165 - $135 = $30

Tim will not be able to sell his laptop as the minimum price at which he is willing to sell his laptop is higher than the current market price.

So, total producer surplus = $150 + $120 + $90 + $30 = $390

Based on the information in the second graph, when the market price of a laptop increases to 1 $65, the number of sellers willing to sell a laptop increases to 4, and the total producer surplus increases to $390.

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