6. Producer surplus and price changesThe following graph shows the.docx

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6. Producer surplus and price changes The following graph shows the supply curve for a group of students looking to sell used economics textbooks. Each student has only one used textbook to sell. Each rectangular segment under the supply curve represents the cost, or minimum acceptable price, for one student. Assume that anyone who has a cost just equal to the market price is willing to sell his or her used textbook. Region A (the purple shaded area) represents the total producer surplus when the market price is (fill in the blank), while Region B (the grey shaded area) represents (Change in total producer suplus OR the total producer surplus) when the market price (is 60, is 70, changes from 90 to 70, OR
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Unformatted text preview: changesz from 60 to 70) . A 4,70 Kyoko Jacques PRICE (Dollars per used textbook) 11 60 - Eleanor Darnell + Beth Andrew + 0 F + 0 1 5 2 2 3 4 QUANTITY (Used textbooks) 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 larger when the price is $70 than when it is $60. Assuming each student receives a positive surplus, Darnell will always receive less producer surplus than Eleanor. 0 0 In order for Eleanor to earn a producer surplus of exactly $10 from selling a used textbook, the market price needs to be $...
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