Question
I need to determine consumer and producer surplus using the following tables: Eric's Value Kenji's Costs Value of first bottle:$10 Cost of first bottle $1
I need to determine consumer and producer surplus using the following tables:
Eric's Value Kenji's Costs
Value of first bottle:$10 Cost of first bottle $1
Value of second bottle:$7 Cost of second bottle $3
Value of third bottle:$3 Cost of third bottle $7
Value of fourth bottle:$1 Cost of fourth bottle $10
The following is their supply and demand schedules:
Price Quantity Supplied Quantity Demanded
More than $10 4 0
$7 to $10 3 1
$3 to $7 2 2
$1 to $3 1 3
$1 or less 0 4
Price Quantity Supplied Quantity Demanded
2 1? 7?
6 2? 2?
9 3? 1?
A price of $6 brings the supply and demand into equilibrium. (Is this correct?)
At the equilibrium price, the consumer surplus is $$$, producer surplus is $$$ and total surplus is $$$?
I don't know if my numbers with question marks above are correct or not. Those are items I need to answer. I also do not understand how to calculate the costs in the above sentence that have $$$ shown.
Thank you,
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