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24 December, 12:56

Marcus paid $35 to buy a potato cannon, a cylinder that shoots potatoes hundreds of feet. He was willing to pay $45. When Marcus's friend Starling learns that Marcus bought a potato cannon, he asks Marcus if he will sell it for $60, and Marcus agrees. Starling is thrilled, because he would have paid Marcus up to $80 for the cannon. Marcus is also delighted.

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  1. 24 December, 13:01
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    The question is incomplete; Determine the consumer surplus from the original purchase and the additional surplus generated by the resale of the cannon.

    Marcus' consumer surplus = $45-$35 = $10

    Starling's consumer surplus = $80-60 = $20

    Marcus' producer surplus = $60-35 = $25
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