Question

Identify whether each of the following statements best illustrates the concept of consumer surplus, producer surplus, or neither. Statement Consumer Surplus Producer Surplus Neither I sold a jersey sweater for $39, even though I was willing to go as low as $30 in order to sell it. Even though I was willing to pay up to $66 for a used textbook, I bought a used textbook for only $56. I paid $48 for a used laptop last week. This week, the same store is selling laptops for $36.

Answer 1

Step-by-step explanation:

Consumer surplus: The consumer surplus shows a difference between that amount which he actually pays, and willing to pay. In this, it is seen by the consumer/buyer point of view.

Example - Even though I was willing to pay up to $66 for a used textbook, I bought a used textbook for only $56.

Producer surplus: It shows a difference between the price which is accepted by him and the minimum price he is accepted for the sale of the goods.

Example: I sold a jersey sweater for $39, even though I was willing to go as low as $30 in order to sell it.

The last example which is given is not considered anywhere. Hence, ignored it