1.7. The accompanying table shows the supply and demand schedules for used copies of the first edition of this textbook. The supply schedule is derived from offers at amazon.com. The demand schedule is hypothetical.

a. Calculate consumer and producer surplus at the equilibrium in this market.

b. Now the second edition of this textbook becomes available.
As a result, the willingness to pay of each potential buyer for a second-hand copy of the first edition falls by $20. In a table, show the new demand schedule and again calculate consumer and producer surplus at the new equilibrium.

Transcribed Image Text:

Price of book Quantity of books demanded Quantity of books supplied $60 30 0 65 27 3 70 25 75 20 77 80 17 8 85 15 15 90 12 16 95 9 17 100 8 29 105 110 20 31 34