Alex's Weekly Supply 7.50 6.75 6.00 5.25 4.50 3.75 3.00 Price 2.25 A 1.50 Supply 0.75 0 0 2 6 8 10 12 14 16 18 20 QUANTITY (Slices of pizza) each week. Since he receives $3.00 per slice, From the previous graph, you can tell that Alex is willing to supply his 8th slice of pizza for $ the producer surplus he gains from supplying the 8th slice of pizza is $ Suppose the price of pizza were to rise to $3.75 per slice. At this higher price, Alex would receive a producer surplus of $ from the 8th slice of pizza he sells. The following graph shows the weekly market supply of pizza in a small economy. Use the purple point (diamond symbol) to shade the area representing producer surplus (PS) when the price (P) of pizza is $3.00 per slice. Then, use the green point (triangle symbol) to shade the area representing additional producer surplus when the price rises to $3.75 per slice PRICE (Dollars per slice) Use the purple point (diamond symbol) to shade the area representing producer surplus (PS) when the price (P) of pizza is $3.00 per slice. Then, use the green point (triangle symbol) to shade the area representing additional producer surplus when the price rises to $3.75 per slice. ? Small Economy's Weekly Supply 7.50 6.75 Initial PS (P-$3.00) 6.00 A 5.25 Additional PS (P-$3.75) 4.50 P=$3.75 3.75 3.00 P-$3.00 1.50 Supply 0.75 0 20 40 60 80 100 120 160 180 200 140 QUANTITY (Thousands of slices of pizza) PRICE (Dollars per slice)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose the market for pizza is a perfectly competitive market—that is, sellers take the market price as given. Alex owns a restaurant where he sells pizza. The following graph shows Alex's weekly supply curve, represented by the orange line. Point A represents a point along his supply curve. The price of pizza is $3.00 per slice, as shown by the horizontal black line.

From the previous graph, you can tell that Alex is willing to supply his 8th slice of pizza for____each week. Since he receives $3.00 per slice, the producer surplus he gains from supplying the 8th slice of pizza is___.

Suppose the price of pizza were to rise to $3.75 per slice. At this higher price, Alex would receive a producer surplus of____from the 8th slice of pizza he sells.

The following graph shows the weekly market supply of pizza in a small economy.

Use the purple point (diamond symbol) to shade the area representing producer surplus (PS) when the price (P) of pizza is $3.00 per slice. Then, use the green point (triangle symbol) to shade the area representing additional producer surplus when the price rises to $3.75 per slice.

Alex's Weekly Supply
7.50
6.75
6.00
5.25
4.50
3.75
3.00
Price
2.25
A
1.50
Supply
0.75
0
0
2
6
8
10
12
14
16
18
20
QUANTITY (Slices of pizza)
each week. Since he receives $3.00 per slice,
From the previous graph, you can tell that Alex is willing to supply his 8th slice of pizza for $
the producer surplus he gains from supplying the 8th slice of pizza is $
Suppose the price of pizza were to rise to $3.75 per slice. At this higher price, Alex would receive a producer surplus of $
from the 8th slice
of pizza he sells.
The following graph shows the weekly market supply of pizza in a small economy.
Use the purple point (diamond symbol) to shade the area representing producer surplus (PS) when the price (P) of pizza is $3.00 per slice. Then, use
the green point (triangle symbol) to shade the area representing additional producer surplus when the price rises to $3.75 per slice
PRICE (Dollars per slice)

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