Question

 The following graph shows the supply curve for a group of students looking to sell used graphing calculators. Each student has only one used calculator to sell. Each rectangular segment under the supply curve represents the "cost," or minimum acceptable price, for one student. Assume that anyone who has a cost just equal to the market price is willing to sell his or her used calculator.

 Region A (the purple shaded area) represents the total producer surplus when the market price is _______  , while Region B (the grey shaded area) represents the total producer surplus when the market price _______ .

 In the following table, indicate which statements are true or false based on the information provided on the previous graph. 

Statement True False

 Assuming each student receives a positive surplus, Lorenzo will always receive more producer surplus than Neha. 

 Producer surplus is smaller when the price is $175 than when it is $125.

 In order for Andrew to earn a producer surplus of exactly $50 from selling a used calculator, the market price needs to be _______ .

Answer 1

Answer:-

Region A (purple area) represents the total producer surplus when the market price is $125. While Region B (grey area) represents the change in total producer surplus when the market price changes from $125 to $195

Assuming each student receives a positive surplus; Lorenzo will always receive more producer surplus than Neha – True

Producer surplus is smaller when the price is $175 than when it is $125 – False

In order for Andrew to earn a producer surplus of exactly $50 from selling a used calculator, the market price needs to be 200 + 50 = $250