Question

Homework (Ch 07) 7. Producer surplus for an individual and a market . Suppose the market for plzza is a perfectly competitive market-that is, sellers take the market price as given. Van owns a restaurant w pizza. The following graph shows Van's weekly supply curve, represented by the orange line. Point A represents of pizza is $3.00 per slice, as shown by the horizontal black line. PRICE (Dollars per slice) R & + From the previous graph, you can tell that Van is willing to supply his sth slice of pizza producer surplus he gains from supplying the sth slice of pizza is $ . he receives $3.00 per slice, the Suppose the price of pizza were to rise to $3.75 per slice. At this higher price, Van would rece pizza he sells producer surplus of s from the 8th slice of The following graph shows the weekly market supply of pizza in a small economy.

Answer 1

Blanks-

1) 2.25

2) 3-2.25 = 0.75

3) 3.75- 2.25 = 1.50

Small Economy's Weekly Supply Initial PS (P=$3.00) Additional PS (P-$3.75) PRICE (Dollars per slice) 0.75 Supply 0 20 180 40 60 80 100 120 140 160 QUANTITY (Thousands of slices of pizza)