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Rashid [163]
3 years ago
13

Tim mows neighborhood lawns for extra money. Suppose that he would be willing to mow one lawn for ​$14​, a second lawn for ​$16​

, and a third lawn for ​$22. Also suppose that three neighbors are interested in having their lawns mowed. Mrs. Jones would be willing to pay ​$30 to have her lawn​ mowed, Mr. Wilson would be willing to pay ​$28, and Ms. Smith would be willing to pay ​$22.
Business
1 answer:
zimovet [89]3 years ago
8 0
The answer in what if Tom offers to mow lawns for $22 each, what will be his producer surplus?
Tim's producer surplus would be $14 
Tim would be able to mow all three lawns at a price of $22, because all three of his neighbors would be willing to pay at least that much. Tim would receive a total of $22 x 3, or $66 for mowing the three lawns. 
Tim's "supply curve" would be: he would be willing to mow three lawns for a total of $14 + $16 + $22, or $52. 
He receives $66 for something that he would be willing to do for $52, so his producer surplus would be $14.
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