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s344n2d4d5 [400]
4 years ago
15

Andrew paid $30 to buy a potato cannon, a cylinder that shoots potatoes hundreds of feet. He was willing to pay $45. When Andrew

's friend Nick learns that Andrew bought a potato cannon, he asks Andrew if he will sell it for $60, and Andrew agrees, since he would have sold it for $45. Nick is thrilled, since he would have paid Andrew up to $80 for the cannon. Andrew is also delighted. What is the total surplus generated from Andrew’s sale to Nick?
Business
1 answer:
irinina [24]4 years ago
3 0

Answer:

The total surplus from Andrew's sale to Nick is $35.

Explanation:

The total surplus is the sum of producer surplus and consumer surplus.

The consumer surplus is the difference between the maximum price a consumer is willing to pay for a product and the price he/she actually has to pay.

While producer surplus is the difference between the minimum price a producer is willing to accept for a product and the price he/she actually gets.

Consumer surplus for Nick

= $80 - $60

= $20

Producer surplus for Andrew

= $60 - $45

= $15

Total surplus from generated from Andrew's sale to Nick

= $20 + $15

= $35

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3 years ago
Target ROI is 19% Invested Capital is $569,512 Full Cost per unit $1,124 Expected sales volume is 959 units. If the company pric
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Answer:

The amount of profit to be added to the cost of each unit = $112.83

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<em>Profit is the difference between the selling price per unit and full cost per unit. To determine the the amount of profit to be added , we will divide the total return on invested capital by the number of units to be produced and sold. This is given below as follows:</em>

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