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6 November, 04:59

For each of the scenarios, calculate the surplus and indicate if it is a producer surplus or a consumer 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 $35 pair of jeans which cost $35 pre-discount.

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  1. 6 November, 06:23
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    Producer surplus.

    Explanation:

    Producer surplus is the difference between the price of a product they're willing to sell and the price they're gonna actually received. In this case she is willing to spend $30 + $10 coupon and she buys $35 pair of jeans.

    So, she's only paying $30, that means seller is receiving $5 less.

    Therefore, producer surplus is $5.
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