2) Assume the market price for tangerines is 18.00 per bushel. At the market price, tangerine growers are willing to supply a quantity of 12 ,000 bushels per week The quantity supplied drops to zero when the price falls to 5.00 per bushel. Construct a graph showing this data, calculate the total producer surplus in the market for tangerines and show the total producer surplus on the graph.

To construct a graph showing the given data, we need to plot the supply curve and the demand curve. The supply curve represents the quantity supplied at different prices, while the demand curve represents the quantity demanded at different prices.<br /><br />Given information:<br />- Market price for tangerines: $\$ 18.00$ per bushel<br />- Quantity supplied at the market price: 12,000 bushels per week<br />- Quantity supplied drops to zero when the price falls to $\$ 5.00$ per bushel<br /><br />Step 1: Plot the supply curve.<br />The supply curve is a straight line that starts at the origin (0,0) and rises to the point (12,000, 18). This is because the quantity supplied drops to zero when the price falls to $\$ 5.00$ per bushel, and the quantity supplied is 12,000 bushels per week at the market price of $\$ 18.00$ per bushel.<br /><br />Step 2: Plot the demand curve.<br />The demand curve is a downward-sloping line that starts at the point (12,000, 18) and falls to the point (0, 5). This is because the quantity demanded is 12,000 bushels per week at the market price of $\$ 18.00$ per bushel, and the quantity demanded drops to zero when the price falls to $\$ 5.00$ per bushel.<br /><br />Step 3: Calculate the total producer surplus.<br />The total producer surplus is the area between the supply curve and the market price, from the origin to the point (12,000, 18).<br /><br />The formula for the area of a triangle is:<br />Area = (base × height) / 2<br /><br />In this case, the base is the quantity supplied (12,000 bushels) and the height is the difference between the market price ($18.00) and the minimum price at which the quantity supplied is zero ($5.00).<br /><br />Area = (12,000 × (18 - 5)) / 2<br /> = (12,000 × 13) / 2<br /> = 156,000 / 2<br /> = 78,000<br /><br />Therefore, the total producer surplus in the market for tangerines is $\$ 78,000$.<br /><br />Step 4: Show the total producer surplus on the graph.<br />To show the total producer surplus on the graph, we can shade the area between the supply curve and the market price, from the origin to the point (12,000, 18). This shaded area represents the total producer surplus of $\$ 78,000$.