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7. Producer surplus for an individual and a market Suppose the market for cinnamon rolls is perfectly competitive, so sellers take the market price as given. Paolo manages a bakery that offers cinnamon rolls for sale. The following graph plots Paolo's weekly supply curve (orange line). Point A represents a point along his supply curve. The price of cinnamon rolls is $2.25 per roll, which is given by the black horizontal line. PRICE (Dollars per roll) 9.00 8.25 7.50 6.75 6.00 5.25 4.50 3.75 3.00 2.25 Price 1.50 A 0.75 Supply Paolo's Weekly Supply 0 0 2 4 6 8 10 12 14 16 18 20 22 24 QUANTITY (Rolls) (?) Using the previous graph, you can determine that Paolo is willing to supply his 6th weekly roll for $ producer surplus earned from supplying the 6th roll is $ Since he receives $2.25 per roll, the Suppose the price of cinnamon rolls were to rise to $3.00 per roll. At this higher price, Paolo would receive a producer surplus of $ 6th roll he sells. from the The following graph plots the weekly market supply curve (orange line) for cinnamon rolls in a hypothetical small economy.

7. Producer surplus for an individual and a market Suppose the market for cinnamon rolls is perfectly competitive, so sellers take the market price as given. Paolo manages a bakery that offers cinnamon rolls for sale. The following graph plots Paolo's weekly supply curve (orange line). Point A represents a point along his supply curve. The price of cinnamon rolls is $2.25 per roll, which is given by the black horizontal line. PRICE (Dollars per roll) 9.00 8.25 7.50 6.75 6.00 5.25 4.50 3.75 3.00 2.25 Price 1.50 A 0.75 Supply Paolo's Weekly Supply 0 0 2 4 6 8 10 12 14 16 18 20 22 24 QUANTITY (Rolls) (?) Using the previous graph, you can determine that Paolo is willing to supply his 6th weekly roll for $ producer surplus earned from supplying the 6th roll is $ Since he receives $2.25 per roll, the Suppose the price of cinnamon rolls were to rise to $3.00 per roll. At this higher price, Paolo would receive a producer surplus of $ 6th roll he sells. from the The following graph plots the weekly market supply curve (orange line) for cinnamon rolls in a hypothetical small economy.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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7. Producer surplus for an individual and a market Suppose the market for cinnamon rolls is perfectly competitive, so sellers take the market price as given. Paolo manages a bakery that offers cinnamon rolls for sale. The following graph plots Paolo's weekly supply curve (orange line). Point A represents a point along his supply curve. The price of cinnamon rolls is $2.25 per roll, which is given by the black horizontal line. PRICE (Dollars per roll) 9.00 8.25 7.50 6.75 6.00 5.25 4.50 3.75 3.00 2.25 Price 1.50 A 0.75 Supply Paolo's Weekly Supply 0 0 2 4 6 8 10 12 14 16 18 20 22 24 QUANTITY (Rolls) (?) Using the previous graph, you can determine that Paolo is willing to supply his 6th weekly roll for $ producer surplus earned from supplying the 6th roll is $ Since he receives $2.25 per roll, the Suppose the price of cinnamon rolls were to rise to $3.00 per roll. At this higher price, Paolo would receive a producer surplus of $ 6th roll he sells. from the The following graph plots the weekly market supply curve (orange line) for cinnamon rolls in a hypothetical small economy.
Transcribed Image Text:7. Producer surplus for an individual and a market Suppose the market for cinnamon rolls is perfectly competitive, so sellers take the market price as given. Paolo manages a bakery that offers cinnamon rolls for sale. The following graph plots Paolo's weekly supply curve (orange line). Point A represents a point along his supply curve. The price of cinnamon rolls is $2.25 per roll, which is given by the black horizontal line. PRICE (Dollars per roll) 9.00 8.25 7.50 6.75 6.00 5.25 4.50 3.75 3.00 2.25 Price 1.50 A 0.75 Supply Paolo's Weekly Supply 0 0 2 4 6 8 10 12 14 16 18 20 22 24 QUANTITY (Rolls) (?) Using the previous graph, you can determine that Paolo is willing to supply his 6th weekly roll for $ producer surplus earned from supplying the 6th roll is $ Since he receives $2.25 per roll, the Suppose the price of cinnamon rolls were to rise to $3.00 per roll. At this higher price, Paolo would receive a producer surplus of $ 6th roll he sells. from the The following graph plots the weekly market supply curve (orange line) for cinnamon rolls in a hypothetical small economy.
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