right of the corresponding segment on the supply curve.) Use the rectangles to shade the areas representing producer surplus for each person who is willing to sell a motor scooter at a market price of $70. (Note: If a person will not sell a motor scooter at the market price, indicate this by leaving their rectangle in its original position on the palette.) ? PRICE (Dollars per motor scooter) 160 140 120 100 80 60 40 20 0 0 1 Shen Valerie Dmitri Caroline Antonio 2 3 4 5 QUANTITY (Motor scooters) Market Price 6 7 8 Shen Valerie Antonio Caroline Dmitri

right of the corresponding segment on the supply curve.) Use the rectangles to shade the areas representing producer surplus for each person who is willing to sell a motor scooter at a market price of $70. (Note: If a person will not sell a motor scooter at the market price, indicate this by leaving their rectangle in its original position on the palette.) ? PRICE (Dollars per motor scooter) 160 140 120 100 80 60 40 20 0 0 1 Shen Valerie Dmitri Caroline Antonio 2 3 4 5 QUANTITY (Motor scooters) Market Price 6 7 8 Shen Valerie Antonio Caroline Dmitri

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Market Surplus and Shortage Analysis

In everyday language, a “surplus” indicates that there is an excess of something, while a “shortage” means that there is a scarcity of it. In economics, “market surplus” refers to the condition where the quantity of a certain good more available than what is required or “demanded” by the market. In the same way, a “market shortage” refers to the condition where the quantity of a certain good is less available than what is “demanded” by the market. If quantity in demand is written as Qd and quantity that is supplied is written as Qs, then, the condition Qs > Qd indicates market surplus and condition Qd > Qs indicates market shortage.

Question

The following graph plots a supply curve (orange line) for several sellers in the market for motor scooters in State College, a university town in
Pennsylvania. Each seller has a single motor scooter for sale. The market price of motor scooters is given by the horizontal black line at $70.
Each rectangle on the graph corresponds to a particular seller in this market: blue (circle symbols) for Shen, green (triangle symbols) for Valerie,
purple (diamond symbols) for Antonio, tan (dash symbols) for Caroline, and orange (square symbols) for Dmitri. (Note: The name labels are to the
right of the corresponding segment on the supply curve.)
Use the rectangles to shade the areas representing producer surplus for each person who is willing to sell a motor scooter at a market price of $70.
(Note: If a person will not sell a motor scooter at the market price, indicate this by leaving their rectangle in its original position on the palette.)
PRICE (Dollars per motor scooter)
160
140
120
100
80
60
40
20
0
0
1
Shen
2
Valerie
Dmitri
Caroline
Antonio
3
4
5
QUANTITY (Motor scooters)
Market Price
6
7
8
Based on the information on the preceding graph, you can tell that
producer surplus in this market will be $
Shen
Valerie
Antonio
Caroline
Dmitri
will sell motor scooters at the given market price, and total

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