Please Help with the following The image depicts a standard supply and demand graph, illustrating the interaction of price (P) and quantity (Q) in a market.**Axes:**- The vertical axis represents price (P) in dollars, ranging from 13 to 20.- The horizontal axis represents quantity (Q) in units, with a specific value marked at 50.**Curves:**- The upward-sloping line labeled "S" denotes the supply curve.- The downward-sloping line labeled "D" denotes the demand curve.**Equilibrium Point:**- The intersection of the supply and demand curves occurs at a price of $16 and a quantity of 50 units. This is the equilibrium point where market supply equals market demand.**Dotted Lines:**- A horizontal dashed line extends from the price level of $16 to the equilibrium point.- A vertical dashed line extends from the quantity level of 50 to the equilibrium point.**Calculation of Producer Surplus:**Producer surplus is the area above the supply curve and below the equilibrium price, up to the equilibrium quantity. This is represented by the triangle beneath the equilibrium price ($16) down to the supply curve, from 0 to the equilibrium quantity (50 units).**Question:**"Producer surplus in this market is ____."**Options:**- $75- $175- $200- Not enough informationTo calculate producer surplus, use the formula for the area of a triangle:\[ \text{Producer surplus} = \frac{1}{2} \times (\text{Base} \times \text{Height}) \]- **Base** = Equilibrium quantity (50 units)- **Height** = Difference between equilibrium price ($16) and the lowest price on the supply curve ($13) Calculate the surplus accordingly. The image features a standard supply and demand graph. The vertical axis represents the price in dollars (P), ranging from 0 to 20. The horizontal axis indicates the quantity in units (Q). The supply curve (S) slopes upward, while the demand curve (D) slopes downward. The two curves intersect at a price of $16 and a quantity of 50 units.There are lines indicating:- A horizontal line from the price of $16 extending to meet the demand curve.- A vertical line descending from this intersection point to the quantity axis at 50 units.- Another horizontal line from the price of $13 indicating a point on the demand curve.An interactive question is provided below the graph:"Consider the following market. Consumer surplus in this market is _____."The answer options are:- $75- $100- $175- Not enough informationThe option "$75" is selected.

Answer -the producer surplus is $75 and the Consumer surplus is $100.Consumer surplus is the area above the price line and below the demand curve. Consumer surplus=12×base×height=12×50×(20-16)=12×50×4=100 Producer surplus is the area below the price line and above the supply curve. Producer surplus=12×base×height=12×50×(16-13)=12×50×3=$75

Answered: Producer surplus in this market is O…

Business

Economics

Producer surplus in this market is O $75 $175 O $200 Not enough information

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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