Question

Identify whether each of the following statements best illustrates the concept of consumer surplus, producer surplus, or neither.Statement Consumer Producer Neither Surplus Surplus I sold a used laptop for $149, even though I was willing to go as low as $140 in order to sell it.I sold a watch for $59 on eBay last week. This week, someone offered me $145 for it. Even though I was willing to pay up to $46 for a jersey sweater, I bought a jersey sweater for only $39.

Answer 1

Answer: Statement 1 ( Laptop) = Producer surplus

              Statement 2 ( watch ) = Neither

              Statement 3 ( jersey sweater) = Consumer surplus

Explanation:

Hi, Consumer surplus happens when the price that consumers pay for a product or service is less than the price they're willing to pay.

• Even though I was willing to pay up to $46 for a jersey sweater, I bought a jersey sweater for only $39.  Consumer surplus

Producer surplus   is measured as the difference between what producers are willing and able to supply a good for and the price they actually receive

• I sold a used laptop for $149, even though I was willing to go as low as $140 .Producer surplus

• I sold a watch for $59 on eBay last week. This week, someone offered me $145 for it.  neither

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