Suppose the market for pizza is a perfectly competitive market-that is, sellers take the market price as given. Sharon owns a restaurant where she sells pizza. The following graph shows Sharon's weekly supply curve, represented by the orange line. Polnt A represents a point along her supply curve. The price of pizza is $3.00 per slice, as shown by the hortzontal black line. Sharon's Wookly Supply 7.50 6.75+ 6.00 525 4.50 3.75 3.00 Price 2.25 1.50 0.75 Supply 8 10 QUANTITY (Sicas of pizza) 2 12 14 16 18 20 From the previous graph, you can tell that Sharon is willing to supply her sth slice of pizza for each week. Since she recelves $3.00 per slice, the producer surplus she galns from supplying the sth slice of pizza is 5 Suppose the price of pizza were to rise to $3.75 per slice. At this higher price, Sharon would recelve a producer surplus of s from the sth slice of pizza she sells. PRICE (Dallars par slice)

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Answer all problems in attachment. 

Suppose the market for plzza is a perfectly competitive market-that Is, sellers take the market price as given. Sharon owns a restaurant where she
sells plzza. The following graph shows Sharon's weekly supply curve, represented by the orange line. Polnt A represents a polnt along her supply
curve. The price of plzza is $3.00 per slice, as shown by the hortzontal black line.
Sharon's Wookly Supply
7.50
6.75
6.00
5.25
4.50 +
3.75
3.00
Price
2.25
1.50
Supply
0.75
4.
10
12
14
16
18
20
QUANTITY (Slicas of pizza)
From the prevlous graph, you can tell that Sharon Is willing to supply her sth slice of plzza for $
each week, Since she recelves $3.00 per
slice, the producer surplus she galns from supplying the Sth slice of pizza Is $
Suppose the price of pizza were to rise to $3.75 per slice. At this higher price, Sharon would recelve a producer surplus of $
from the 8th
slice of pizza she sells.
PRICE (Dallars par slice)
Transcribed Image Text:Suppose the market for plzza is a perfectly competitive market-that Is, sellers take the market price as given. Sharon owns a restaurant where she sells plzza. The following graph shows Sharon's weekly supply curve, represented by the orange line. Polnt A represents a polnt along her supply curve. The price of plzza is $3.00 per slice, as shown by the hortzontal black line. Sharon's Wookly Supply 7.50 6.75 6.00 5.25 4.50 + 3.75 3.00 Price 2.25 1.50 Supply 0.75 4. 10 12 14 16 18 20 QUANTITY (Slicas of pizza) From the prevlous graph, you can tell that Sharon Is willing to supply her sth slice of plzza for $ each week, Since she recelves $3.00 per slice, the producer surplus she galns from supplying the Sth slice of pizza Is $ Suppose the price of pizza were to rise to $3.75 per slice. At this higher price, Sharon would recelve a producer surplus of $ from the 8th slice of pizza she sells. PRICE (Dallars par slice)
The following graph shows the weekly market supply of plzza In a small economy.
Use the purple polnt (diamond symbol) to shade the area representing producer surplus (PS) when the price (P) of pizza is $3.00 per slice. Then, use
the green polnt (triangle symbol) to shade the area representing additional producer surplus when the price rises to $3.75 per slice.
Small Economy's Wookly Supply
7.50
6.75
Inisal PS (P=$3.00)
6.00
A
5.25
4.50
Addional PS (P=$3.75)
P=$3.75
3.75
3.00
P=$3.00
2.25
150
Supply
0.75
20
40
60
80
100 120 140
160 180 200
QUANTITY (Thousands of slices of pizza)
PRICE (Dallars par slice)
Transcribed Image Text:The following graph shows the weekly market supply of plzza In a small economy. Use the purple polnt (diamond symbol) to shade the area representing producer surplus (PS) when the price (P) of pizza is $3.00 per slice. Then, use the green polnt (triangle symbol) to shade the area representing additional producer surplus when the price rises to $3.75 per slice. Small Economy's Wookly Supply 7.50 6.75 Inisal PS (P=$3.00) 6.00 A 5.25 4.50 Addional PS (P=$3.75) P=$3.75 3.75 3.00 P=$3.00 2.25 150 Supply 0.75 20 40 60 80 100 120 140 160 180 200 QUANTITY (Thousands of slices of pizza) PRICE (Dallars par slice)
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