Hi there, looking for help with this 3 part question, thanks for your time Part

Question

Hi there, looking for help with this 3 part question, thanks for your time

Part 1: Use the diagram above If the price in this market is $7.00, what is the quantity supplied in the market?

A. 20 Units

B. 40 Units

C. 60 Units

D. 80 units

E. 100 Units

Part 2: Use the diagram above. If the price in this market is initially $7.00 and it is then allowed to move to the equilibrium, does the quantity supplied increase or decrease, and by how much?

A. The quantity supplied decreases by 40 units

B. The quantity supplied decreases by 20 units

C. The quantity supplied remains unchanged

D. The quantity supplied increases by 20 units

E. The quantity supplied increases by 40 units

Part 3: Use the diagram above. If the price in this market is initially $7.00 and the most dissatisfied supplier sells a unit of the good for $5.50 to the most eager buyer, by how much does economic surplus rise?

A. $1.50

B. $2.50

C. $4.00

D. $5.50

E. $7.00

Explanation / Answer

If the price in this market is $7.00, the quantity supplied in the market is 80 units.

If the price in this market is initially $7.00 and it is then allowed to move to the equilibrium, then the quantity supplied decreases by 20 units

If the price in this market is initially $7.00 and the most dissatisfied supplier sells a unit of the good for $5.50 to the most eager buyer, the economic surplus rise by 1.50

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