Consider Minnie the pearl producer with cost curves as shown on the right. Minnie produces 1,000 pearls

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Consider Minnie the pearl producer with cost curves as shown on the right. Minnie produces 1,000 pearls when the price of pearls is $100.

a. What is the area of producer surplus earned by Minnie if the price of pearls is $100?
b. Explain why areas ADI and ADLM must be equal.

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Microeconomics

ISBN: 9781464146978

1st Edition

Authors: Austan Goolsbee, Steven Levitt, Chad Syverson

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Question Posted: Jan 13, 2016 02:38 AM

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Consider Minnie the pearl producer with cost curves as shown on the right. Minnie produces 1,000 pearls

Question:

Price & cost MC ATC (S/unit) A $100 B C D AVC 0 Quantity 1,000

Step by Step Answer:

a When the price is 100 Minnie produces 1000 units The producer surplus earn...View the full answer

Microeconomics

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