Suppose the demand for French bread rises. Explain what happens to producer surplus in the market for French bread. Explain what happens to producer surplus in the market for flour. Illustrate your answers with diagrams.
Suppose the
the market for French bread. Explain what happens to producer surplus in the market for
flour. Illustrate your answers with diagrams.
It is a hot day, and Bert is thirsty. Here is the value he places on each bottle of water:
Value of first bottle $7
Value of second bottle $5
Value of third bottle $3
Value of fourth bottle $1
a. From this information, derive Bert’s demand schedule. Graph his demand curve for bottled
water.
b. If the
graph.
c. If the price falls to $2, how does quantity demanded change? How does Bert’s consumer
surplus change? Show these changes in your graph.
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