Question

Use the information below to construct a stepgraph of the six sellers' willingness to sell. $$ \begin{array}{cc} & \begin{array}{c} \text { Willingness to } \\ \text { sell one unit (\$) } \end{array} \\ \text { Joseph } & 25 \\ \text { Juan } & 20 \\ \text { Kristin } & 60 \\ \text { Peter } & 10 \\ \text { Candice } & 25 \\ \text { Solomon } & 50 \end{array} $$

Short answer

Create a step graph using the organized price data and seller count at each price point.

Step-by-step solution

Gather the Data

Collect the data on each seller's willingness to sell one unit. The data given is: Joseph: $25, Juan: $20, Kristin: $60, Peter: $10, Candice: $25, Solomon: $50.

Organize the Data

Organize the data in increasing order of willingness to sell. This will provide a clear view of who is willing to sell at lower prices: Peter: $10, Juan: $20, Joseph: $25, Candice: $25, Solomon: $50, Kristin: $60.

Identify Unique Price Points

Identify the unique price points among the sellers: $10, $20, $25, $50, and $60.

Count Sellers at Each Price Point

Count the number of sellers willing to sell at each unique price point: $10 (1 seller), $20 (1 seller), $25 (2 sellers), $50 (1 seller), $60 (1 seller).

Construct Step Graph Axes

Draw two perpendicular lines to represent the axes of the graph. The x-axis will represent the number of sellers and the y-axis will represent the price (willingness to sell).

Plot Step Graph

Begin plotting the points on the graph. Starting from the origin, for each price point, draw a horizontal line corresponding to the number of sellers at that price. For example, a step at $10 runs from 0 to 1 (1 seller), up to $20, the next runs from 1 to 2, and so forth, ensuring the steps are flat until a change in price.

Label the Graph

Label each step with the price it corresponds to, and ensure the x-axis is labeled with the number of sellers and the y-axis is labeled with price. This helps clarify the information presented in the step graph.

Key concepts

Step Graph

A step graph is a unique way to visualize data when dealing with discrete values. In the context of willingness to sell, it perfectly represents the point at which each seller is ready to transact. Unlike a line graph, the step graph reflects constant values over intervals. To create this graph for the given exercise:

• Organize the data by listing sellers' willingness from lowest to highest prices.
• Identify and list each unique price.
• On the x-axis, represent the number of sellers, while the y-axis represents price.
• For each price, draw a horizontal line (or step) showing sellers' count until the next price increase.

This step-by-step visual approach allows for quick interpretation of who sells at what price before moving on to higher asking prices.

Market Supply

Market supply essentially reflects the cumulative number of sellers willing to provide goods at various prices. Here, it simplifies understanding of sellers' price availability and helps answer key questions about supply side in economics.
The exercise requires identifying who sells at each price point and understanding how collective actions form the market supply. Each seller represents one unit of the good. Therefore the quantity supplied increases step by step as we include each new seller with a higher price point in the graph.

• Peter starts the supply at $10, creating our first bump in the supply curve on the graph.
• Each additional seller who accepts a price increases the market supply precisely by one unit.
• This results in an incremental increase or 'step' on the curve for every increase in sellers.

Understanding market supply aids in determining how much of a good will be available in the marketplace at each price.

Price Points

Price points are crucial in this analysis. They indicate separate prices at which sellers are willing to transact. While constructing the step graph, identifying these unique points is essential to structuring your graph and understanding seller dynamics.
In the exercise:

• We have identified $10, $20, $25, $50, and $60 as unique price points.
• Each point represents a potential selling price corresponding with sellers' acceptance.
• Multiple sellers may share a price point, as seen at $25, where both Joseph and Candice agree to sell.

Determining these price points allows students to sort sellers efficiently and measure supply steps relative to price on the graph effectively.

Microeconomic Analysis

Microeconomic analysis delves into individual or small group behaviors in economics, such as those of sellers in this exercise. By studying willingness to sell, we examine factors influencing pricing strategies and market operations.
In this scenario:

• Sellers' willingness provides insights into supply behavior and elasticity.
• The step graph aids in analyzing how supply changes with price, highlighting sellers’ pricing thresholds.
• Observing seller reactions to different prices can predict how market supply might react to price changes.

Microeconomics allows us to break these concepts down to personal or group decision levels, essential for understanding wider market influences and dynamics.