Question

For each scenario, decide whether it creates a producer or a consumer surplus. Then, calculate the ensuing surplus. Alice is willing to spend $ 30 on a pair of jeans, and has a coupon for $ 10 off which she found online. She selects and purchases a pair of jeans which cost $ 35 pre-discount.

Answer 1

Consumer surplus

$5

Step-by-step explanation:

Consumer surplus is the difference between the willingness to pay of a consumer and the price of the good

Consumer surplus = willingness to pay - price of the good.

The price of the good = $35 - $10 = $25

$30 - $25 = $5

Producer surplus is the difference between the price of a good and the least amount sellers would be willing to sell their product.

I hope my answer helps you