Consumer and Producer Surplus
Consumer surplus is
the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it
Producer surplus is
the amount a seller is paid minus the cost of production.
Table 7-10 The following table represents the costs of five possible sellers. SellerCostAbby$1,600Bobby$1,300Dianne$1,100Evaline$900Carlos$800 Refer to Table 7-10. Suppose each of the five sellers can supply at most one unit of the good. The market quantity supplied is exactly 4 if the price is
1,400
Figure 7-11 Refer to Figure 7-11.If the supply curve is S, the demand curve is D, and the equilibrium price is $100, what is the producer surplus?
2,500
Table 7-10 The following table represents the costs of five possible sellers. SellerCostAbby$1,600Bobby$1,300Dianne$1,100Evaline$900Carlos$800 Refer to Table 7-10. If the market price is $1,000, the producer surplus in the market is
300
Table 7-1 BuyerWillingness To PayCalvin$150.00Sam$135.00Andrew$120.00Lori$100.00 Refer to Table 7-1. If the price of the product is $122, then the total consumer surplus is
41
Suppose Lauren, Leslie and Lydia all purchase bulletin boards for their rooms for $15 each. Lauren's willingness to pay was $35, Leslie's willingness to pay was $25, and Lydia's willingness to pay was $30. Total consumer surplus for these three would be
45
Figure 7-11 Refer to Figure 7-11.If the supply curve is S', the demand curve is D, and the equilibrium price is $150, what is the producer surplus?
625
Figure 7-3 Refer to Figure 7-3. When the price is P2, consumer surplus is
A
Figure 7-3 Refer to Figure 7-3. When the price is P1, consumer surplus is
A+B+C.
Table 7-1 BuyerWillingness To PayCalvin$150.00Sam$135.00Andrew$120.00Lori$100.00 Refer to Table 7-1. If the price of the product is $130, then who would be willing to purchase the product?
Calvin and Sam
Table 7-10 The following table represents the costs of five possible sellers. SellerCostAbby$1,600Bobby$1,300Dianne$1,100Evaline$900Carlos$800 Refer to Table 7-10. If the price is $1,l50, who would be willing to supply the product?
Carlos, Dianne, and Evaline
able 7-1 BuyerWillingness To PayCalvin$150.00Sam$135.00Andrew$120.00Lori$100.00 Refer to Table 7-1. If the market price is $105,
Sam's consumer surplus is $30 and total consumer surplus is $90.
On a graph, the area below a demand curve and above the price measures
consumer surplus.
Figure 7-3 Refer to Figure 7-3. When the price rises from P1 to P2, consumer surplus
decreases by an amount equal to B+C.