Homework 5

Maximizes the combined welfare of buyers and sellers

A result of welfare economics is that the equilibrium price of a product is considered to be the best price because it

3.50 each

At Nick's Bakery, the cost to make a cheese danish is $1.50 per danish. As a result of selling 10 danishes, Nick experiences a producer surplus in the amount of $20. Nick must be selling his danishes for Total revenue/number sold = revenue for each Revenue for each + cost to make each = price he sold it at

Dallas consumer surplus would increase

Dallas buys strawberries, and he would be willing to pay more than he now pays. Suppose that Dallas has a change in his tastes such that he values strawberries more than before. If the market price is the same as before, then

Cost of building fences

Justin builds fences for a living. Justin's out-of-pocket expenses (for wood, paint, etc.) plus the value that he places on his own time amount to his

50

Kristi and Rebecca sell lemondae on the corner for 0.5 dollars per cup, it cost them 0.10 to make each cup. On a certain day, their producer surplus is 20$, how many cups did kristi and rebecca sell

The well being of sellers

Producer surplus directly measures

Producer surplus

the amount a seller is paid for a good minus the seller's cost of providing it