1. Now imagine that a small gas station is willing to accept the following prices for selling gallons of gas:
They are willing to sell 1 gallon if the price is at or above $3
They are willing to sell 2 gallons if the price is at or above $3.50
They are willing to sell 3 gallons if the price is at or above $4
They are willing to sell 4 gallons if the price is at or above $4.50
What is the gas station's producer surplus if the market price is equal to $4 per gallon? (Assume that if they are willing to sell a gallon of gas, there are buyers available to buy it at the market price)
a) $0.5
b) $1
c) $1.50
d) $2
e) $2.50
2. At the price of P1*, what area(s) represent(s) CONSUMER surplus?
a) A
b) A+ B+C+D
c) B+G+H
d) G+F+E+H+I
e) A+B
f) G+H