Chat with AI
International Economics 14th Edition by Thomas Pugel
Edition 14ISBN: 978-0071280792International Economics 14th Edition by Thomas Pugel
Edition 14ISBN: 978-0071280792 Exercise 2
What is producer surplus Using real-world data, what information would you need to measure producer surplus for a product
Explanation
Verified
Verified
Producer surplus is the net gain to producers from being able to sell a product through a market. It is the difference between the lowest price at which some producer is willing to supply each unit of the product and the actual market price that is paid, summed over all units that are produced and sold. The lowest price at which someone is willing to supply the unit just covers the extra (marginal) cost of producing that unit. To measure producer surplus for a product using real world data, three major pieces of information are needed. First, the market price. Second, the quantity supplied. Third, some information about the slope (or shape) of the supply curve. How would quantity supplied change if the market price decreased Or, what are the extra costs of producing each unit up to the actual quantity supplied Producer surplus could then be measured as the area below the market price line and above the supply curve.
International Economics 14th Edition by Thomas Pugel
Why don’t you like this exercise?
Other Minimum 8 character and maximum 255 character
Character 255
