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17 Friday, October 06, 2006

17 Friday, October 06, 2006 - Friday Microeconomics...

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Friday, October 06, 2006 Microeconomics PRODUCER SURPLUS is the price of the product minus the willingness to accept LAWN CARE Price per lawn P S 12 Waylon Price P S 10 Willie Price 8 Hank Producer Surplus 6 Kenny 4 Toby 2 Allen Q 1 2 3 4 5 6 Q # of lawns cut At a price of $10 are willing to cut lawns but some people would be willing to cut lawns less than $10 o Producer surplus PRODUCER SURPLUS Allen $8 Toby $6 Kenny $4 Hank $2 Willie $0 $20 = market producer surplus If price rises, producer surplus rises for 2 reasons: 1. Those already selling products receive additional producer surplus because they are receiving more for the product than before 2. Since the price is now higher, some new producers enter the market and receive surplus on the additional units of output solid
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Friday, October 06, 2006 P S Total
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