Question
D'Andrepaid $35to buy a potato cannon, a cylinder that shoots potatoes hundreds of feet. He was willing to pay $45. WhenD'Andre's friendNicklearns thatD'Andrebought a potato
D'Andrepaid $35to buy a potato cannon, a cylinder that shoots potatoes hundreds of feet. He was willing to pay $45. WhenD'Andre's friendNicklearns thatD'Andrebought a potato cannon, he asksD'Andreif he will sell it for $65, andD'Andreagrees.Nickis thrilled, because he would have paidD'Andreup to $80 for the cannon.D'Andreis also delighted.
Determine the consumer surplus from the original purchase and the additional surplus generated by the resale of the cannon.
D'Andre's original consumer surplus:$
D'Andre's producer surplus from the resale:$
Nick's consumer surplus from the resale:$
Total surplus generated from the resale:$
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started