Answered: PRICE (Dollars per used air fryer) 180…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

(ALL OWNERSHIP GOES TO CENGAGE)

The following graph plots a supply curve (orange line) for a group of recent graduates looking to sell used air fryers. Each seller has only a single used air fryer available for sale. Think of each rectangular area beneath the supply curve as the “cost,” or minimum price that each seller is willing to accept. Assume that anyone who has a cost that equals the market price is willing to sell their used air fryer.

(image below)

Region X (the purple shaded area) represents total producer surplus when the market price is equal to $____ , while Region Y (the grey shaded area) represent ___________ when the market price ________.

(image below)

In the following table, indicate which statements are true or false based on the information provided on the previous graph.
Statement
Assuming each seller receives a positive surplus, Clancy will always receive less producer surplus than Eileen.
Producer surplus is larger when the price is $105 than when it is $75.
True False
In order for Poornima to earn a producer surplus of exactly $45 from selling a used air fryer, the market price must be $

PRICE (Dollars per used air fryer)
180
150
120
90
60
30
4
0
Clancy
1
хо
Eileen
Hubert
Kate
0+
Manuel
2
3
4
QUANTITY (Used air fryers)
Poornima
5
Сл
6
?

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