Problem 1. a) Identify the additional area of producer surplus as a result of increase in price. b) Estimate the corresponding values. c) Explain how these changes came to be. Price PhP120.00 P. PhP100.00 P, C 0 D B A E Q₁ 50,000 F LL Q₂ 70,000 Supply Quantity

Problem 1. a) Identify the additional area of producer surplus as a result of increase in price. b) Estimate the corresponding values. c) Explain how these changes came to be. Price PhP120.00 P. PhP100.00 P, C 0 D B A E Q₁ 50,000 F LL Q₂ 70,000 Supply Quantity

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

Problem 1.
a) Identify the additional
area of producer
surplus as a result of
increase in price.
b) Estimate the
corresponding values.
c) Explain how these
changes came to be.
Price
PhP120.00 - P.
PhP100.00 P₁
D
B
A
E
C
F
LL
Q₂
50,000 70,000
Supply
Quantity

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Step 1: Defining production

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Step 2: a-Identifying producers' surplus

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Step 3: b-estimating value of the new producers' surplus

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Step 4: c-explaining these changes

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