Part 1In the figure, when production is 3 units with a price of $3, the producer surplus in this market equals A. b + g. B. a + b + f + g + h + i. C. f + g. D. a + b + f + g.

Question

Part 1In the​ figure, when production is 3 units with a price of​ $3, the producer surplus in this market equals A. b​ + g. B. a​ + b​ + f​ + g​ + h​ + i. C. f​ + g. D. a​ + b​ + f​ + g.

BlackTom AI · Accepted Answer

First, let's restate the scenario to focus our analysis: we are asked to determine the producer surplus (PS) in a market when production is 3 units and the price is $3. Producer surplus is the area above the supply curve and below the price, from quantity 0 up to the current quantity (here, 3 units). The diagram labels specific geometric regions with letters (a, b, f, g, h, i, etc.), and the options are different sums of these labeled areas.

Option A: b + g. This would imply that the PS is composed of the regions labeled b and g only. If the supply curve lies below the price across the 0 to 3 unit range, PS should include all the vertical strip areas between the price line and the supply curve from 0 to 3. If b represents something other than the vertical distance up to price (for example, a region below or outside the 0-to-3 interval), including only b and g would generally omit portions of the area between price and supply across the initial units. In short, this combination seems unlikely to capture the full PS up to Q=3 unless the graph’s geometry dictates it.

Option B: a + b + f + g + h + i. This option adds multiple regions (a, b, f, g, h, i). If PS is the area between price and supply up to Q=3, we would expect precisely the regions that lie directly under the price line and above the supply curve from 0 to 3. Including a, h, and i suggests adding areas that may lie outside the relevant 0-to-3 interval or outside the space between price and supply for the first three units. Therefore, this option appears to overcount or include irrelevant regions for PS at Q=3.

Option C: f + g. This combination focuses on the regions labeled f and g, which, in typical diagrams of producer surplus, correspond to the vertical slices between the price line (at $3) and the supply curve from 0 up to Q=3. If the graph’s labeling assigns f and g precisely to the PS-contributing areas up to the current quantity, then summing f and g would give exactly the area of PS at Q=3. This aligns with the standard definition of PS as the area under the price and above the supply curve for the produced quantity.

Option D: a + b + f + g. Here, we add a and b to the f + g parts. If a and b lie below the price line but outside the 0-to-3 production interval, or if they double-count regions already included in f and g, this would misrepresent PS. Without knowing the exact shape, including a and b risks counting areas that are not part of PS at Q=3, so this option is less consistent with the standard PS calculation for the given quantity.

In summary, PS up to Q=3 is defined by the region between the price line ($3) and the supply curve from Q = 0 to Q = 3. Among the options, f + g is the one that most plausibly corresponds to exactly that area without including extraneous regions, while the other sums either omit portions of the PS area or include additional regions not part of PS at this quantity.

Homework:ch5_hw

Part 1In the figure, when production is 3 units with a price of $3, the producer surplus in this market equals A. b + g. B. a + b + f + g + h + i. C. f + g. D. a + b + f + g.

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Homework:ch5_hw

Part 1In the​ figure, when production is 3 units with a price of​ $3, the producer surplus in this market equals A. b​ + g. B. a​ + b​ + f​ + g​ + h​ + i. C. f​ + g. D. a​ + b​ + f​ + g.

View Explanation

Log in for full answers

Similar Questions

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24. The producer surplus increases whenever the price increases

Use the figure below to answer the following question. What area represents producer surplus after the government imposes the excise tax on the market?

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MC Qu. 20 Use the table below to answer... Use the table below to answer the following question. Units Market Price Minimum Acceptable Price 1 $10 $2 2 10 4 3 10 6 4 10 8 5 10 10 6 10 14 What is the value of producer surplus in the table above?

Relative to the unregulated market outcome, what is the change in producer surplus brought about the $3 subsidy per unit?

More Practical Tools for Students Powered by AI Study Helper

Making Your Study Simpler

Part 1In the figure, when production is 3 units with a price of $3, the producer surplus in this market equals A. b + g. B. a + b + f + g + h + i. C. f + g. D. a + b + f + g.