Why Choose Us?
0% AI Guarantee
Human-written only.
24/7 Support
Anytime, anywhere.
Plagiarism Free
100% Original.
Expert Tutors
Masters & PhDs.
100% Confidential
Your privacy matters.
On-Time Delivery
Never miss a deadline.
Table: Pumpkin Market Quantity of Pumpkins Andy's willingness to pay Ben's willingness to pay Cindy's cost Diane's cost 1st pumpkin $12 $11 $ 3 $ 4 2nd pumpkin 10 9 5 6 3rd pumpkin 8 7 8 9 4th pumpkin 6 5 10 11 Reference: Ref 4-27 (Table: Pumpkin Market) There are two consumers, Andy and Ben, in the market for pumpkins
Table: Pumpkin Market
| Quantity of Pumpkins |
Andy's willingness to pay |
Ben's willingness to pay |
Cindy's cost |
Diane's cost |
| 1st pumpkin |
$12 |
$11 |
$ 3 |
$ 4 |
| 2nd pumpkin |
10 |
9 |
5 |
6 |
| 3rd pumpkin |
8 |
7 |
8 |
9 |
| 4th pumpkin |
6 |
5 |
10 |
11 |
Reference: Ref 4-27
(Table: Pumpkin Market) There are two consumers, Andy and Ben, in the market for pumpkins. Their willingness to pay for each pumpkin is shown in the table Pumpkin Market. There are two producers of pumpkins, Cindy and Diane, and their costs are also shown. The equilibrium price for pumpkins is $8 and the equilibrium quantity is 5. At the equilibrium price and quantity, Diane sells _____ pumpkins, and her producer surplus is_____.
| A. |
one; $4 |
|
| B. |
two; $6 |
|
| C. |
three; $8 |
|
| D. |
four; $11 |
Expert Solution
Answer:
B. Diane will sell two pumpkins since the first pumpkin costs $4 and the second pumpkin costs $6.
The producer surplus for the first pumpkin is $8-$6=2
and the producer surplus for the second pumpkin is $8-$6=$2.
So a total of $6.
Producer surplus is the market price less the cost to the producer.
Archived Solution
You have full access to this solution. To save a copy with all formatting and attachments, use the button below.
For ready-to-submit work, please order a fresh solution below.
