Question
Jules wants to purchase a Royale with cheese from Vincent. Vincent is willing to offer this tasty burger for $3. The most Jules is willing
Jules wants to purchase a Royale with cheese from Vincent. Vincent is willing to offer this tasty burger for $3. The most Jules is willing to pay for the tasty burger is $8 (after all, his girlfriend is a vegetarian, so he doesn't get many opportunities for tasty burgers).
If the trade takes place at $4, how much producer surplus goes to Vincent?
How much consumer surplus goes to Jules?*
My solution was to find the are of triangle(consumer surplus and producer surplus)
4*4/2=8 <- I am wrong and I don't understand why I am wrong.
When do I find the area of rectangle ?
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