"Senior citizens often pay lower prices and movie theaters and restaurants, because they get a "senior discount" (e.g. a 10% price reduction). Standard producer theory provides only one possible reason for that." Provide a good explanation of your answer

"Senior citizens often pay lower prices and movie theaters and restaurants, because they get a "senior discount" (e.g. a 10% price reduction). Standard producer theory provides only one possible reason for that." Provide a good explanation of your answer

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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"Senior citizens often pay lower prices and movie theaters and restaurants, because they get a "senior
discount" (e.g. a 10% price reduction). Standard producer theory provides only one possible reason for
that." Provide a good explanation of your answer

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Graphically, producer surplus is the area from the market price ($120) down to the supply curve and over to the equilibrium quantity of 120.
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Why would firms raise the price if there is a market shortage, and why would some consumers pay that higher price. At what point would firms stop raising the price?
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Consider the following market demand and supply: Demand: P = 16 - 4Qd Supply: P = 6+ 3Qs If the market is at equilibrium, what is the producer surplus? Note: Express your answer in units of dollars, to at least two digits after the decimal. 3.06
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