Joey. David. Tracy, and Surty own one track and they\'ve each modified to sell t

Question

Joey. David. Tracy, and Surty own one track and they've each modified to sell them as fixed-100 or more Likewise. David wtfl sell his fixle for $150. gear bikes or "fixies" Joey is wilkng to sell his Tracy at $200. and Surty for $350 Currently, al fixies sell for $250 On the graph below, move the gray Price line from $0 to the market price for fixies. Then, draw each person's producer surplus (PS) by moving the areas assigned to each seller. Place the seller with the largest producer surplus the furthest to the left If a seller would not sell a bike, leave their shaded area where it is. Maintain

Explanation / Answer

Total Producer Surplus = Sum of all sellers (Price - Difference in Willingness to sell )

= (250 - 100) + (250 - 150) +(250 - 200) +(250 - 350)

= 150 + 100 + 50 -100

= 200

Since Quantity or width is 1 for all sellers. No need to multiply PS with Q

Order of Producer surplus : Joey > David > Tracy > Surly

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