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Answer the following questions based on the graph that represents J.R.'s demand for ribs per week at Judy's Rib Shack.
a. How high must the price of ribs be for Judy to supply 20 ribs to the market?
b.At the equilibrium price, what is the magnitude of total surplus in the market? Show all the steps.
c. If the price of ribs fell to $5, what would happen to Judy's producer surplus? Explain why. Be precise.
d. Using your words, explain why the graph verifies the fact that the market equilibrium maximizes the sum of producer and consumer surplus.
e. What happens to the quantity consumed in this market if the government imposes a price-ceiling equal to $1? Using words, explain why.
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