First, label the following scenarios as to whether they would create a producer or consumer surplus. Then, after you have labeled each scenario, calculate the ensuing surplus.

Jeff finds some steaks for $16 for which he would have been willing to pay $20. The butcher notices the meat is near the expiration date and gives him an extra 75% off.

Question

Camryn Steele

Business

25 May, 20:04

First, label the following scenarios as to whether they would create a producer or consumer surplus. Then, after you have labeled each scenario, calculate the ensuing surplus.

Jeff finds some steaks for $16 for which he would have been willing to pay $20. The butcher notices the meat is near the expiration date and gives him an extra 75% off.

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Damarion Ramos · Answer 1

Alice is willing to spend $30 on a pair of jeans, and has a coupon for $10 off she found online. She selects and purchases a $35 pair of jeans, pre-discount.

(Alice's consumer surplus, $5)

Jeff finds some steaks for $16 for which he would have been willing to pay $20. The butcher notices the meat is near the expiration date and gives him an extra 75% off.

(Jeff's consumer surplus, $16)

Nicole has in her possession a hockey puck from the 2010 Winter Olympic Games and sells it on eBay. She will only sell the puck if the winning bid is greater than or equal to $500. After bidding closes, the last bid stands at $500.

(Nicole's producer surplus, $0)

Claire is trying to sell her used calculus textbook online. She asks for $150 or best offer and is willing to sell for anything over $100. She is able to sell it for $125.

(Claire's producer surplus, $25)

Roy is willing to pay $2.50 for a sports drink. He notices the price is $2.79 and chooses not to purchase a sports drink. (Roy's consumer surplus, $0)