### Market Equilibrium and Producer Surplus#### Graph Description:The graph presents a basic supply and demand model with the following characteristics:- **Axes:** - The vertical axis represents the price in dollars, ranging from $0 to $22.50. - The horizontal axis represents quantity, ranging from 0 to 15.- **Curves:** - The **S (Supply)** curve is upward sloping, indicating that as the price increases, the quantity supplied increases. - The **D (Demand)** curve is downward sloping, indicating that as the price decreases, the quantity demanded increases.- **Intersection:** - The point where the supply and demand curves intersect signifies the market equilibrium, indicating the equilibrium price and quantity.#### Price Floor Analysis:Considering the graph and the market dynamics:- A price floor is set at **$15**.- The exercise question is: "Comparing to market equilibrium price, a price floor at $15 would increase the producer surplus by:"#### Options for Producer Surplus Increase:- $30- $22- $12- $8- $20Students are prompted to analyze how the imposition of the price floor affects producer surplus by selecting the correct option from the list provided.

Market equilibrium price: It is the price that is being determined based on the equilibrium point,…

Answered: $22.50 20 15 5- 5 9 15 Quantity Look at…

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 sellers try to sell at $1. What happen? $4 $3 $2 $1 0 O Shortage O Change in demand O Change in supply Surplus 20 40 60 80
00 R #3 w/ 20 Price 10- 100- 06 08 70. Demand 09 -+ 05 45 -4- 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 Buaxtity Refer to the above figure. At the equilibrium price, consumer surplus is O $1,000. O $2,000. O $3,500. O $500. MacBook Pro esc %23 24 2 4. 51 A S. H.
Calculate the producer surplus when a price floor of $18 is imposed in the market. The graph is attached for your convenience. O $40 O $240 O $200 $60 Price (dollars per pound) $21 18 15 13 11 40 80 Supply Demand Quantity (pounds)
Price $60 40 20 0 50 100 Quantity 150 O $60, resulting in a surplus of 100 units. O $60, resulting in a shortage of 100 units. $40, resulting in equilibrium. O $20, resulting in a shortage of 100 units. 200 Supply Demand Refer to the above diagram. A price floor could be established at:
11. If suppliers could only provide 5 units, what would the price be? $8 Supply $6- $4 Demand $2- 0 5 10 15 20 25 30 35 Quantity $8 O $5 O $10 O $2 O O Price
5. Using the graph above, suppose a price floor of $14.00 is imposed. As a result, total surplus will: Increase by $80 Decrease by $10 Decrease by $20 Decrease by $80 a. b. C. d. Brice Homework 5: Government Policies in the Market Price $20 18 16 4 12 10 8 6 4. D 10 20 30 40 50 60 70 80 90 100 Quantity
If the market price reduces from $7 to $5 what is the gain in consumer surplus? Price $20 $7 $5 O 480 850 425 O 1725 O 200 200 230 Quantity
Figure price 20 18+ 16 14 12 10 8. 4+ 10 20 30 40 50 60 70 80 90 quaxtity Refer to Figure. If price in this market is currently $14, then there would be a(n) O a. shortage 20 units therefore, the price will rise. O b. surplus of 20 units therefore, the price will fall. Os surplus of 40 units therefore, the price will fall. Od. surplus of 40 units therefore, the price will rise. Click Save Al Anstcers to save all answers. ま注

$4.00 $3.50- $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $0.00 0 5 10 15 20 25 30 Quantity A price floor set at a price of $1.00 will result in O no change in the market outcomes. a surplus of 20 units. a surplus of 10 units. a shortage of 20 units. a shortage of 10 units. Price O O Supply Demand 35 40
O The demand curve for a product is given by Qp = 400-20P and the supply curve for a product is given by Qs = 16P-32. O a. Illustrate the demand curve and the supply curve on the same graph. O b. Find the equilibrium price and quantity. O c. Find numerical values for the consumer surplus and the producer surplus. O d. Identify consumer surplus and producer surplus on your graph.
Dollars per unit $20- S $15 e $10 $6 $2 2,000 1,000 1,200 Quantity per period Use the graph above. If the price in the market is $10, what is the consumer surplus in the market? O None of the answers is correct O $40,000 O2,000 units O $10,000 Consumer surplus Producer surplus
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$22.50 20 15 5- 5 9 15 Quantity Look at the figure Market I. Comparing to market equilibrium price, a price floor at $15 would increase the producer surplus by: O $30 O $22 O $12 O $8 O $20 60