Using a diagram explain the consumer and producer surplus between Boss and fans Concept Introduction: Demand Curve: The curve shows how the quantity demanded changes due to changes in the price . It is a negatively sloped curve. Supply Curve: The curve shows how the quantity supplied changes due to changes in the price. It is a positively sloped curve. Consumer Surplus : It is a difference between the amount that a consumer wants to pay and the real amount which he pays for goods and services. Producer Surplus: It is the difference between the amount that a producer wants to receive and the real amount which he receives for goods and services.

Question

Want to see more full solutions like this?

Answer 1

Question

Definition Definition Consumer surplus is the consumers' gain from trade. The consumer surplus is the area below the demand curve but above the equilibrium price, up to the equilibrium quantity. Producer surplus is the producer's gain from trade. The producer surplus is the area above the supply curve but below the equilibrium price, up to the equilibrium quantity. Consumer surplus is represented by Area A and producer surplus is represented by Area B.

Chapter 4, Problem 1BCQ

To determine

Using a diagram explain the consumer and producer surplus between Boss and fans

Concept Introduction:

Demand Curve: The curve shows how the quantity demanded changes due to changes in the price. It is a negatively sloped curve.

Supply Curve: The curve shows how the quantity supplied changes due to changes in the price. It is a positively sloped curve.

Consumer Surplus: It is a difference between the amount that a consumer wants to pay and the real amount which he pays for goods and services.

Producer Surplus: It is the difference between the amount that a producer wants to receive and the real amount which he receives for goods and services.

Expert Solution & Answer

Explanation of Solution

Economics, Chapter 4, Problem 1BCQ

Fig 1

In the above table, x-axis shows quantity of tickets sold and y-axis shows the price of ticket.

The market price of ticket is $284, however the boss sold it for only $75.

The reduction in the price has led to loss in the producer surplus and gain in the consumer surplus. When price is $284, the quantity sold is Q₁_,but when it decreased to $75, the quantity of ticket sold increased to Q₂.

Lower price has made consumers better off, but there was a loss in producer surplus shown by the shaded area. It was found that the boss lost almost $4 million.

Conclusion:

Thus, there was a loss in producer surplus due to fall in price.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

An increase of 20 million bicycles demand as a result of a lower p

??!!

. What the heck is this GDP thingy? It is Thursday afternoon, just a few days before the holiday season starts in your region, and you decided to visit your uncle Chao who owns a local delivery company. While sitting in the living room watching the evening news with your uncle, you heard the news reporter stating the following with an optimistic tone: "According to recent studies, gross domestic product (GDP) is rising due to an increase in consumer spending. The increase in spending was due to an increase in consumer confidence because the job market has shown a positive increase in both employment and income." Immediately, your uncle Chao looked at you with some confusion on his face and asked: What the heck is GDP, and why does the news dude seem excited about its increase? Does this “good” change in this GDP thingy have any effect on my delivery business? How? Do I need to do something different to prepare for the rise in GDP? How?

Answer 2

Question

Definition Definition Consumer surplus is the consumers' gain from trade. The consumer surplus is the area below the demand curve but above the equilibrium price, up to the equilibrium quantity. Producer surplus is the producer's gain from trade. The producer surplus is the area above the supply curve but below the equilibrium price, up to the equilibrium quantity. Consumer surplus is represented by Area A and producer surplus is represented by Area B.

Chapter 4, Problem 1BCQ

To determine

Using a diagram explain the consumer and producer surplus between Boss and fans

Concept Introduction:

Demand Curve: The curve shows how the quantity demanded changes due to changes in the price. It is a negatively sloped curve.

Supply Curve: The curve shows how the quantity supplied changes due to changes in the price. It is a positively sloped curve.

Consumer Surplus: It is a difference between the amount that a consumer wants to pay and the real amount which he pays for goods and services.

Producer Surplus: It is the difference between the amount that a producer wants to receive and the real amount which he receives for goods and services.

Expert Solution & Answer

Explanation of Solution

Economics, Chapter 4, Problem 1BCQ

Fig 1

In the above table, x-axis shows quantity of tickets sold and y-axis shows the price of ticket.

The market price of ticket is $284, however the boss sold it for only $75.

The reduction in the price has led to loss in the producer surplus and gain in the consumer surplus. When price is $284, the quantity sold is Q₁_,but when it decreased to $75, the quantity of ticket sold increased to Q₂.

Lower price has made consumers better off, but there was a loss in producer surplus shown by the shaded area. It was found that the boss lost almost $4 million.

Conclusion:

Thus, there was a loss in producer surplus due to fall in price.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Definition Definition Consumer surplus is the consumers' gain from trade. The consumer surplus is the area below the demand curve but above the equilibrium price, up to the equilibrium quantity. Producer surplus is the producer's gain from trade. The producer surplus is the area above the supply curve but below the equilibrium price, up to the equilibrium quantity. Consumer surplus is represented by Area A and producer surplus is represented by Area B.

Chapter 4, Problem 1BCQ

To determine

Using a diagram explain the consumer and producer surplus between Boss and fans

Concept Introduction:

Demand Curve: The curve shows how the quantity demanded changes due to changes in the price. It is a negatively sloped curve.

Supply Curve: The curve shows how the quantity supplied changes due to changes in the price. It is a positively sloped curve.

Consumer Surplus: It is a difference between the amount that a consumer wants to pay and the real amount which he pays for goods and services.

Producer Surplus: It is the difference between the amount that a producer wants to receive and the real amount which he receives for goods and services.

Expert Solution & Answer

Explanation of Solution

Economics, Chapter 4, Problem 1BCQ

Fig 1

In the above table, x-axis shows quantity of tickets sold and y-axis shows the price of ticket.

The market price of ticket is $284, however the boss sold it for only $75.

The reduction in the price has led to loss in the producer surplus and gain in the consumer surplus. When price is $284, the quantity sold is Q₁_,but when it decreased to $75, the quantity of ticket sold increased to Q₂.

Lower price has made consumers better off, but there was a loss in producer surplus shown by the shaded area. It was found that the boss lost almost $4 million.

Conclusion:

Thus, there was a loss in producer surplus due to fall in price.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Definition Definition Consumer surplus is the consumers' gain from trade. The consumer surplus is the area below the demand curve but above the equilibrium price, up to the equilibrium quantity. Producer surplus is the producer's gain from trade. The producer surplus is the area above the supply curve but below the equilibrium price, up to the equilibrium quantity. Consumer surplus is represented by Area A and producer surplus is represented by Area B.

Chapter 4, Problem 1BCQ

To determine

Using a diagram explain the consumer and producer surplus between Boss and fans

Concept Introduction:

Demand Curve: The curve shows how the quantity demanded changes due to changes in the price. It is a negatively sloped curve.

Supply Curve: The curve shows how the quantity supplied changes due to changes in the price. It is a positively sloped curve.

Consumer Surplus: It is a difference between the amount that a consumer wants to pay and the real amount which he pays for goods and services.

Producer Surplus: It is the difference between the amount that a producer wants to receive and the real amount which he receives for goods and services.

Expert Solution & Answer

Explanation of Solution

Economics, Chapter 4, Problem 1BCQ

Fig 1

In the above table, x-axis shows quantity of tickets sold and y-axis shows the price of ticket.

The market price of ticket is $284, however the boss sold it for only $75.

The reduction in the price has led to loss in the producer surplus and gain in the consumer surplus. When price is $284, the quantity sold is Q₁_,but when it decreased to $75, the quantity of ticket sold increased to Q₂.

Lower price has made consumers better off, but there was a loss in producer surplus shown by the shaded area. It was found that the boss lost almost $4 million.

Conclusion:

Thus, there was a loss in producer surplus due to fall in price.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 4, Problem 1BCQ

To determine

Using a diagram explain the consumer and producer surplus between Boss and fans

Concept Introduction:

Demand Curve: The curve shows how the quantity demanded changes due to changes in the price. It is a negatively sloped curve.

Supply Curve: The curve shows how the quantity supplied changes due to changes in the price. It is a positively sloped curve.

Consumer Surplus: It is a difference between the amount that a consumer wants to pay and the real amount which he pays for goods and services.

Producer Surplus: It is the difference between the amount that a producer wants to receive and the real amount which he receives for goods and services.

Expert Solution & Answer

Explanation of Solution

Economics, Chapter 4, Problem 1BCQ

Fig 1

In the above table, x-axis shows quantity of tickets sold and y-axis shows the price of ticket.

The market price of ticket is $284, however the boss sold it for only $75.

The reduction in the price has led to loss in the producer surplus and gain in the consumer surplus. When price is $284, the quantity sold is Q₁_,but when it decreased to $75, the quantity of ticket sold increased to Q₂.

Lower price has made consumers better off, but there was a loss in producer surplus shown by the shaded area. It was found that the boss lost almost $4 million.

Conclusion:

Thus, there was a loss in producer surplus due to fall in price.

Answer 6

Chapter 4, Problem 1BCQ

To determine

Using a diagram explain the consumer and producer surplus between Boss and fans

Concept Introduction:

Demand Curve: The curve shows how the quantity demanded changes due to changes in the price. It is a negatively sloped curve.

Supply Curve: The curve shows how the quantity supplied changes due to changes in the price. It is a positively sloped curve.

Consumer Surplus: It is a difference between the amount that a consumer wants to pay and the real amount which he pays for goods and services.

Producer Surplus: It is the difference between the amount that a producer wants to receive and the real amount which he receives for goods and services.

Expert Solution & Answer

Explanation of Solution

Economics, Chapter 4, Problem 1BCQ

Fig 1

In the above table, x-axis shows quantity of tickets sold and y-axis shows the price of ticket.

The market price of ticket is $284, however the boss sold it for only $75.

The reduction in the price has led to loss in the producer surplus and gain in the consumer surplus. When price is $284, the quantity sold is Q₁_,but when it decreased to $75, the quantity of ticket sold increased to Q₂.

Lower price has made consumers better off, but there was a loss in producer surplus shown by the shaded area. It was found that the boss lost almost $4 million.

Conclusion:

Thus, there was a loss in producer surplus due to fall in price.

Answer 7

Chapter 4, Problem 1BCQ

To determine

Using a diagram explain the consumer and producer surplus between Boss and fans

Concept Introduction:

Demand Curve: The curve shows how the quantity demanded changes due to changes in the price. It is a negatively sloped curve.

Supply Curve: The curve shows how the quantity supplied changes due to changes in the price. It is a positively sloped curve.

Consumer Surplus: It is a difference between the amount that a consumer wants to pay and the real amount which he pays for goods and services.

Producer Surplus: It is the difference between the amount that a producer wants to receive and the real amount which he receives for goods and services.

Answer 8

Expert Solution & Answer

Explanation of Solution

Economics, Chapter 4, Problem 1BCQ

Fig 1

In the above table, x-axis shows quantity of tickets sold and y-axis shows the price of ticket.

The market price of ticket is $284, however the boss sold it for only $75.

The reduction in the price has led to loss in the producer surplus and gain in the consumer surplus. When price is $284, the quantity sold is Q₁_,but when it decreased to $75, the quantity of ticket sold increased to Q₂.

Lower price has made consumers better off, but there was a loss in producer surplus shown by the shaded area. It was found that the boss lost almost $4 million.

Conclusion:

Thus, there was a loss in producer surplus due to fall in price.