Andy purchased a new drone last year for $1,200. He no longer wants it and wishes to sell the drone. He now values the drone at $400. Jeff wants to purchase a drone, and his willingness to pay is $800. Assume that Andy and Jeff agree on a price of $700 for the drone.
a. What is the producer surplus? $
b. What is the consumer surplus? $
c. What is the combined consumer and producer surplus from this transaction? $
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