Last year the average price for an airline ticket was $450, but the average price dropped to $375 this year due to a decrease in the demand for airplane travel. The accompanying table contains information on the supply of air travel. a. Using the information in the table, move the points on the graph to sketch a supply curve. b. Shade the area on the graph that represents producer surplus from the previous year when the price was $450. Also shade the area that represents producer surplus this year after the price has dropped to $375.

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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Last year the average price for an airline ticket was $450, but the average price dropped to $375 this year due to a decrease in the demand for airplane travel. The accompanying table contains information on the supply of air travel.

a. Using the information in the table, move the points on the graph to sketch a supply curve.

b. Shade the area on the graph that represents producer surplus from the previous year when the price was $450. Also shade the area that represents producer surplus this year after the price has dropped to $375.

 

Average ticket price Quantity supplied (thousands of seats)
$150 200
$300 500
$450 800
$600 1,100
$750 1,400

 

 

c. Producer surplus this year is ____ than producer surplus last year. (refer to graph) 

800
Supplv
750
PS at $450
675
PS at $375
600
525
450
375
300
225
150
200
350
500
650
800
950 1,100 1,250 1,400 1,550
Quantity (thousands of seats)
Price ($ per ticket)
Transcribed Image Text:800 Supplv 750 PS at $450 675 PS at $375 600 525 450 375 300 225 150 200 350 500 650 800 950 1,100 1,250 1,400 1,550 Quantity (thousands of seats) Price ($ per ticket)
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