Calculate the change in producer surplus when the market price increases from $14 to $15 and...
Calculate the change in producer surplus when the market price increases from
$14 to $15
and the quantity supplied increases from
5,000 units to 5,500 units per month. Assume that the supply curve is linear.
Producer surplus will
▼
increase or
decrease?
by _____
(Round your answer to the nearest
penny.)
Homework Answers
Answer
increase by $250.00
The increase in the price increases producer surplus as the producer surplus is the area above the supply curve and below the price
Change in producer surplus =0.5*change in price * change in quantity
=0.5*(15-14)*(5500-5000)
=$250
The producer surplus increases by $250
Add Answer to:
Calculate the change in producer surplus when the market price
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