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topjm [15]
3 years ago
10

For each scenario, decide whether it creates a producer or a consumer surplus. Then, calculate the ensuing surplus.

Business
1 answer:
Gnom [1K]3 years ago
5 0

Answer:

Alice's consumer surplus =  $5

Jeff's consumer surplus = $16

Nicole's producer surplus = $1

Explanation:

Consumer surplus is the difference between the willingness to pay of a consumer and the price of a good.

Consumer surplus = willingness to pay - price of the good

Producer surplus is the difference between the price of a good and the least price the producer is willing to accept

Producer surplus = price of the good - least price the producer is willing to accept

Alice's consumer surplus = $30 - ($35 - $10) = $5

Jeff's consumer surplus = $20 - [$16 - (0.75 x $16)] = $16

Nicole's producer surplus = $501 - $500 = $1

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4 0
3 years ago
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Answer:

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