Consider Janis the pearl producer with cost curves as shown on the right. Janis produces 1,000 pearls when the price of pearls is $100.
a. What is the area of producer surplus earned by Janis if the price of pearls is $100?
b. Explain why areas ADI and ADLM must be equal.

Transcribed Image Text:

Price & cost (S/unit) ,A $100 MC ATC C D AVC EI MS N. CD 1,000 Quantity