Region X (the purple shaded area) represents total producer surplus when the market price is equal to $ while Region Y (the grey shaded area) represents 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 Producer surplus is smaller when the price is $140 than when it is $100. O O Assuming each seller receives a positive surplus, Tim will always receive less producer surplus than Alyssa. O O In order for Crystal to earn a producer surplus of exactly $40 from selling a used textbook, the market price must be7. Producer surplus for an individual and a market Suppose the market for sourdough is perfectly competitive, so sellers take the market price as given. Beth manages a restaurant that offers sourdough for sale. The following graph plots Beth's weekly supply curve (orange line). Point A represents a point along her supply curve. The price of sourdough is $2.25 per slice, which is given by the black horizontal line. (?) Beth's Weekly Supply 5100 8.25 7.50 6.75 6.00 5.25 4.50 PRICE (Dollars per slice) 3.75 3.00 2.25 Price 1.50 "Supply 2 6 8 10 12 14 16 18 20 22 24 QUANTITY (Slices of sourdough) Using the previous graph, you can determine that Beth is willing to supply her 6th weekly slice of sourdough for [S . Since she receives $2.25 per slice, the producer surplus earned from supplying the 6th slice of sourdough is |$Suppose the price of sourdough were to rise to $3.00 per slice. At this higher price, Beth would receive a producer surplus of |S from the 6th slice of sourdough she sells. The following graph plots the weekly market supply curve (orange line) for sourdough in a hypothetical small economy. Use the purple point (diamond symbol) to shade the area representing producer surplus (PS) when the price (P) of sourdough is $2.25 per slice. Then, use the green point (triangle symbol) to shade the area representing additional producer surplus when the price rises to $3.00 per slice. small Economy's Weekly Supply 900 7.50 Initial PS (P=$2 25) A Additional PS (P=$3.00) 5.21 PRICE ( Dollars per slice) 4 50 3.76 P=$3.00 300 P=$2.25 175 Supply 24 48 72 96 120 144 168 192 216 240 264 288 QUANTITY (Thousands of slices of sourdough)B. Total economic surplus The following graph plots the supply and demand curves in the market for motor scooters. Use the black point (plus symbol) to indicate the equilibrium price and quantity of motor scooters. Then use the green point (triangle symbol) to fi the area representing consumer surplus, and use the purple point (diamond symbol) to fill the area representing producer surplus. -+ 325 Demand Equilibrium 200 A 175 Consumer Surplus 150 125 PRICE (Dollars per scooter) 100 Producer Surplus 75 Go Supply 30 90 120 150 180 210 240 270 300 QUANTITY (Millions of scooters) Total surplus in this market is S million.9. Market efficiency and market failure The following graph shows equilibrium in a free market, with equilibrium quantity of Q F. (?) Supply PRICE Demand QUANTITY For any level of output below Qu, a buyer values a unit of goods in this market the unit will cost a seller. Suppose now that a firm that produces for this market hires a private security force, reducing crime not only in their factory, but also in the small town in which it is located. This is an example of 7 due to6. Producer surplus and price changes The following graph plots a supply curve (orange line) for a group of recent graduates looking to sell used art history textbooks. Each seller has only a single used textbook available for sale. Think of each rectangular area beneath the supply curve as the *cost," or minimum price that each seller is willing to accept. Assume that anyone who has a cost that equals the market price is willing to sell their used textbook. 240 200 Crystal 160 Brian PRICE (Dollars per used textbook) 20 Alyssa Rosa 40 Nick QUANTITY (Used textbooks) Region X (the purple shaded area) represents total producer surplus when the market price is equal to $ ] , while Region Y (the grey shaded area) represents when the market price