Revealed Preference applies to Supply Schedules as well as demand schedules.Look at the images below. which answer is correct. multiple choices can be correct. ### Market Supply Overview#### Graph Interpretation:The graph titled "Market Supply" illustrates the relationship between price and quantity supplied. The horizontal axis (x-axis) represents the quantity supplied, ranging from 0 to 45. The vertical axis (y-axis) shows the price, ranging from 0 to 12. The data points on the graph are connected by a light purple line, denoting the overall market supply. Each data point signifies the total quantity supplied at a particular price level.#### Data Table Analysis:Below the graph is a detailed table showing the quantity supplied by various vendors at different price points. The table is structured as follows:| Price | Boom | Oiy | Cartoon | Apple | Kai | Mint | Market Supply ||-------|------|-----|---------|-------|-----|------|---------------|| 10 | 1 | 7 | 6 | 11 | 10 | 7 | 42 || 9 | 0 | 5 | 5 | 9 | 10 | 5 | 34 || 8 | 0 | 3 | 4 | 7 | 10 | 5 | 31 || 7 | 0 | 3 | 3 | 5 | 8 | 5 | 24 || 6 | 0 | 0 | 1 | 2 | 6 | 5 | 14 || 5 | 0 | 0 | 0 | 1 | 2 | 8 | 11 || 4 | 0 | 0 | 0 | 0 | 2 | 2 | 4 || 3 | 0 | 0 | 0 | 0 | 1 | 1 | 2 || 2 | 0 | 0 | 0 | 0 | 0 | 0 | 0 || 1 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |Key observations from **Market Supply and Individual Preferences in Economics**1. **Kai’s Willingness to Sell at $2** - At a price of $2 per unit, Kai is willing to sell 1 unit of the good.2. **Kai’s Preference at $1** - Kai will not sell any units of the good at a price of $1. This behavior indicates that she derives more satisfaction or utility from consuming the good herself than she does from selling it for $1 and using the money to purchase other goods.3. **Market Supply at $2** - When the price is $2 per unit, the overall market supply is 2 units.4. **Composition of Market Supply at $2** - At the price level of $2, the market supply consists of Boom and Oiy each selling 1 unit of the good.### Understanding the Concepts:- **Willingness to Sell:** This term refers to the minimum price at which a seller is ready to part with a good. If the market price meets or exceeds this threshold, the seller is likely to supply the good. - **Consumer Utility:** This reflects the satisfaction a consumer gains from consuming a good or service. If the utility gained from personal consumption is higher than the utility gained from selling the good, the consumer will choose to keep the good.- **Market Supply:** This is the total quantity of a good that all sellers in the market are willing to sell at a given price. In this case, it is the sum of individual supplies from Boom and Oiy at the price point of $2. By understanding these principles, students can better grasp how individual preferences and market prices interact to determine supply in an economic market.

The market supply is the horizontal summation of the individual supply of the seller. In the given…

At a price of $2, Kai is willing to sell 1 unit of the good. Because Kai will sell O units of the good at a price of $1, this reveals she gets more enjoyment from consuming the good herself than she would get from taking the $1 and buying any amoun of any other good in the world. At a price of $2, market supply would be 2 units. O At a price of $2, the maket supply would be comprised of Boom and Oiy each selling 1 units of the good.

At a price of $2, Kai is willing to sell 1 unit of the good. Because Kai will sell O units of the good at a price of $1, this reveals she gets more enjoyment from consuming the good herself than she would get from taking the $1 and buying any amoun of any other good in the world. At a price of $2, market supply would be 2 units. O At a price of $2, the maket supply would be comprised of Boom and Oiy each selling 1 units of the good.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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