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Do Homework Patrick Figaro Google Chrome https://www.mathxl.com/Student/PlayerHomework.aspx?homeworkld 3316262524&questionld; 13&flushed; false&cld; 3408601&centerwin; yes Homework: first assignment 27 of 30 (0 complete Score 0 of 1 p Concept Question 6.8 Figure 4B-4 Figure 4B-4 shows the market for economics textbooks. Suppose the government thinks that the Price market clearing price is too high and tries to help the consumers by imposing a ceiling price of $10. 30 What is the area in Figure 4B-4 that represents producer surplus after the imposition of the price ceiling? 25 O A. A B+ E +F O B. A E 20 O C. C+ B+ F O D. C 10 20 30 40 50 60 70 80 90 100 Quantity Click to select your answer and then click Check Answer. All parts showing Clear All Patrick Figaro 9/20/15 2:34 PM Save HW Score 0%, o of 30 pts Question Help Check Answer 11:35 AM 9/20/2015

Explanation / Answer

The producers surplus will be equal to C. Producers surplus is fifference between the price at which producer is willing to sell and the selling price. At price 15 producer is willing to sell 40 units. At price below 15 say 10 the producer is willing to supply 20 units but the consumer demand is 60. There will always be shortage of supply in the market. The price set is 15 and if the demand is 60, the conumer will pay 15, rather than 10 as per the demand curve of the consumer. The result is producers surplus or gain which the consumer lost. The producers surplus therefore is below the price set area that is C.

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