Final answer:
The daily producer surplus in the pizza market can be found by calculating the area of a right triangle formed by the equilibrium price and quantity on a supply and demand graph. With an equilibrium price of $2 for 12 pizzas, the total producer surplus is $12.
Step-by-step explanation:
To calculate the daily producer surplus in the pizza market, we need to find the area above the supply curve and below the equilibrium price.
Since we know that the supply equation is Qs = 2 + 5P and the supply equals demand at an equilibrium price of $2 for 12 pizzas, we can first determine the minimum price at which producers are willing to supply pizzas. Setting Qs to 0 (where the supply curve intercepts the price axis) and solving for P gives us the price at which the supplier would be willing to start producing, which is $-0.4.
However, since a negative price does not make sense in this context, the practical minimum price is $0.
Using the equilibrium price P = $2 and the quantity Qs = 12, we plot these on a graph with the price P on the vertical axis and the quantity Qs on the horizontal axis.
We form a right triangle with a base (quantity) of 12 pizzas and a height (price difference) from $0 to $2. The area of this right triangle represents the producer surplus, which is calculated as 1/2 * base * height, or 1/2 * 12 pizzas * $2/pizza = $12. This value of $12 is the total producer surplus in the personal pizza market for the equilibrium price of $2 each.