I am taking Microeconomics.

I have the following question:

The cost of producing stero systems has fallen over the past several decades.

a) Use the supply-and-demand diagram to show the effects of falling production costs on the price and quantity of steros sold.

b) In your diagram, show what happens to consumer surplus and producer surplus.

I understand the question. I am not sure how the graph should look with the price going down for the concumser and producer surplus.

Can anyone provide a place online I can look to find a graph that shows this situation?

Draw your initial supply and demand curves. But this time have the supply and demand curves touch the y-axis. Indicate initial price and quantity

Consumer suplus is the area BELOW the demand curve an ABOVE the price line. Producer surplus is the area BELOW the price line and ABOVE the supply curve.

Now shift the supply curve (to the right indicating an increase in supply. What happens to the new levels of producer and consumer surplus?

I hope this helps

here is a picture

http://en.wikipedia.org/wiki/Consumer_surplus

Certainly! One reliable online resource you can use to find graphs related to microeconomics concepts is an economics textbook website or an educational resource website. These websites often provide detailed explanations and illustrations of various economic concepts, including the effects of changes in production costs on price, quantity, consumer surplus, and producer surplus.

Here are a few reputable websites where you can find graphs and explanations related to the effects of falling production costs on the price and quantity of stereos, as well as consumer surplus and producer surplus:

1. Khan Academy: This website offers a wide range of educational videos and resources on various subjects, including microeconomics. You can find interactive diagrams and explanations on topics like supply and demand, market equilibrium, and consumer and producer surplus. Go to https://www.khanacademy.org/economics-finance-domain/microeconomics to find relevant content.

2. Investopedia: This website is known for its comprehensive collection of articles and videos related to finance and economics. It provides straightforward explanations and graphs on various economic concepts. Visit https://www.investopedia.com/ to search for articles related to microeconomics and falling production costs.

3. EconPort: This website focuses specifically on economics education and provides free access to a variety of graphs and diagrams related to microeconomics. You can explore their collection of interactive graphs and charts at https://www.econport.org/.

Remember that when using online resources, it is essential to critically evaluate the information and ensure that it is from a credible and trustworthy source.