2 Producer surplus for a group of sellers A Aa The following

2. Producer surplus for a group of sellers A Aa The following graph shows the supply curve for a group of sellers in the U.S, market for DVD players Each seller has only one bvb player to sell. Each rectanguler segment under the supply curve represents the \"cost, or minimum acceptable price, for one seller. The market price of a bvo player is $140, as shown by the black horizorkal line Each rectangle on te folkwing graph ooerespands to a particular seller in this market: blue (irdle symbols) for Eric, green/triangle Symbols) far Diega, red (cress swnbels for Calvin, purple (danerd svrmb als) for Brett, and tan (rectangle smbels for Angie, use the rectangles to shad\" the areas representing producer surplus for eich person who is wiling to sell a DND player at a market price of $140 (Note: If a person is net willing to sel this iten at the market price, you will leave his or her rectangle in its original position on the side of the graph PROCE Dollars per DND player Diego Angis Based on the information on the previous graph, you can tell that given market price, and total producer surplus in this market will be will sell DVD players at the Suppase the market price of a DD player changes to $180. n the follawing graph, use the rectangles once again to shade the areas representing producer surplus for each person who is willing to sell a DVD player at the new maket price: blue (drde symbols for Eric, green (triangle symbols) for Diego, red (cross symbols) for Calvin, purple diamond symbols] for Brett, and tan (rectangle symbols) for Angie. Diego ngie Angie Based on the information from the graph, if the market price of a DWD player changed to $190, the number of selers willing to sel a DVD player wuld and total producer surplus would

Solution

Here it is given that the market price of a dvd player is $140. It can be seen in the above diagram that the supply curve cuts the curve represented by the market price at quantity equals 3. So, it can be concluded that 3 sellers (Angie, Brett, Calvin) has the incentive to sell dvd players at the prevailing market price since their minimum supply price is less than that of the market price.

Producers surplus is the difference between the total amount a producer receives and the minimum amount at which he is willing to supply.From the above diagram we can calculate the total producers surplus by the formula used to calculate the area of a rectangle

Total Producers Surplus = (100*1) + (60*1) + (20*1) = 180

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When the market price becomes $180. We can see that now Diego also has the incentive to sell Dvd player along with Angie, Brett, Calvin as his minimum supply price falls below $180. So thus the total number of sellers become 4.

Again using the same formula to calculate Producers Surplus.

Producers Surplus= (140*1) + (100*1) + (60*1) + (20*1) = 320