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Welcome to the Q&A for ECN/APEC 2010, where you can ask questions and receive answers from your fellow students, the TA, and your professor.

Please only ask questions about the material for the course. Try to create discussions about the material we see in class, instead of just thinking of economics in general (this is an introduction to microeconomics class, not a policy or government class).

For questions and discussions about course organization or other course related topics, come see us after class or during office hours.

Feel free to discuss quiz questions on the Q&A, but do not provide direct answers to quiz questions before the quiz's due date.

Question 6 on Midterm 1.

0 votes
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The market price of a good is $5 and 40 units of the good sell at this price. Its supply curve intersects the vertical axis at a price of $1 and has a constant slope. What is the (approximate) value of the producer surplus in this market?

Why is the answer $80 instead of $200?

asked Apr 28 by canvas-e25408d8f8d15 (216 points)

1 Answer

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If you write it you where you have the first point on the x axis at [0,1] that'll represent where the supply curve is going to start. The next point that the question gives is [40,5] the question explains this is the market equilibrium. So if you draw a line from the two points and then back across to the price of 5 then you have a triangle which if you calculate the area it is (.5*40*4) which equals 80.
answered May 1 by canvas-946e15a61c43e (150 points)
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