7. Producer surplus for an individual and a market Suppose the market for gourmat cupcakes is perfectly competitive, so sellers take the market price as given. Dmitri manages a bakery that offers gourmet cupcakes for sale. The following graph plots Dmitris weekly supply curve (orange lina). Point A represents a point along his supply curve. The price of gourmat cupcakes is $2.25 per cupcake, which is given by the black horizontal line PRICE Opera Supply 2 10 300 Wkly Supply Using the previous graph, you can determine that Dmitri is willing to supply his 6th weekly cupcake for cupcake, the producer surplus earned from supplying the 6th cupcake is [ Suppose the price of gourmet cupcakes were to rise to $3.00 per cupcake. At this higher price, Dmitri would receive a producer surplus of from the 6th cupcake he sells The following graph plots the weekly market supply curve (orange fine) for gourmet cupcakes in a hypothetical small economy. Use the purple point (diamond symbol) to shade the area representing producer surplus (PS) when the price (P) of gourmet cupcakes is $2.25 per cupcake. Then, use the green point (triangle symbol) to shade the area representing additional producer surplus when the price rises to $3.00 per Since he receives $2.25 pr Smy's Wely Supply 47296120 144 100 142 216 340 264 28 QUANTITY(Tof gama cupcakes)
7. Producer surplus for an individual and a market Suppose the market for gourmat cupcakes is perfectly competitive, so sellers take the market price as given. Dmitri manages a bakery that offers gourmet cupcakes for sale. The following graph plots Dmitris weekly supply curve (orange lina). Point A represents a point along his supply curve. The price of gourmat cupcakes is $2.25 per cupcake, which is given by the black horizontal line PRICE Opera Supply 2 10 300 Wkly Supply Using the previous graph, you can determine that Dmitri is willing to supply his 6th weekly cupcake for cupcake, the producer surplus earned from supplying the 6th cupcake is [ Suppose the price of gourmet cupcakes were to rise to $3.00 per cupcake. At this higher price, Dmitri would receive a producer surplus of from the 6th cupcake he sells The following graph plots the weekly market supply curve (orange fine) for gourmet cupcakes in a hypothetical small economy. Use the purple point (diamond symbol) to shade the area representing producer surplus (PS) when the price (P) of gourmet cupcakes is $2.25 per cupcake. Then, use the green point (triangle symbol) to shade the area representing additional producer surplus when the price rises to $3.00 per Since he receives $2.25 pr Smy's Wely Supply 47296120 144 100 142 216 340 264 28 QUANTITY(Tof gama cupcakes)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:7. Producer surplus for an individual and a market
Suppose the market for gourmet cupcakes is perfectly competitive, so sellers take the market price as given. Dmitri manages a bakery that offers
gourmet cupcakes for sale. The following graph plots Dmitri's weekly supply curve (orange line). Point A represents a point along his supply curve. The
price of gourmet cupcakes is $2.25 per cupcake, which is given by the black horizontal line.
PRICE (Delars per cupcake)
(
7:50
4.75
9.00
4.50
7.50
3.75
3.75
4.50
0.75
0
0
Price
Supply
0.75 +
2
Using the previous graph, you can determine that Dmitri is willing to supply his 6th weekly cupcake for
cupcake, the producer surplus earned from supplying the 6th cupcake is
Suppose the price of gourmet cupcakes were to rise to $3.00 per cupcake. At this higher price, Dmitri would receive a producer surplus of
from the 6th cupcake he sells.
The following graph plots the weekly market supply curve (orange line) for gourmet cupcakes in a hypothetical small economy.
*
Use the purple point (diamond symbol) to shade the area representing producer surplus (PS) when the price (P) of gourmet cupcakes is $2.25 per
cupcake. Then, use the green point (triangle symbol) to shade the area representing additional producer surplus when the price rises to $3.00 per
cupcake
P-$3.00
21
6
P-$2.25
Um Wkly Supply
Supply
10
14
QUANTITY (Cபpவன்ர்
18 20
(?)
Small Economy's Weekly Supply
120 144 180 182 210 240 204 208
QUANTITY (Thousands of gourmet cupca)
Since he receives $2.25 per
InalPS (-$2.25)
Add($3.00)
(?)
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