Question

uppose that a customer's willingness to pay for a product is $120, and the seller's willingness to sell is $110. If the negotiated price is $119: consumer surplus is negative. consumer surplus is greater than producer surplus. producer surplus is negative. producer surplus is greater than consumer surplus.

Answer 1

producer surplus is greater than consumer surplus.

Step-by-step explanation:

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

Consumer surplus = willingness to pay - price of the product

$120 - $119 = $1

Producer surplus is the difference between the price of a product and the least price the seller is willing to sell his product.

Producer surplus = price - least price the seller is willing to sell his product.

$119 - $110 = $9

From the calculation, producer surplus is greater than consumer surplus.

I hope my answer helps you