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Total Economic Surplus. A hot dog cart can sell the Astro special to consumers downtown who have a $10 reservation price or sell outside the
Total Economic Surplus.
A hot dog cart can sell the Astro special to consumers downtown who have a $10 reservation price or sell outside the World Series to game goers who have a reservation price of $20. An equal number of hot dogs can be sold at each site with the marginal and average costs are $6 at each site.
How can the total economic surplus be maximized?
(a) sell only downtown for $10
(b) charge $10 at both locations and go back and forth
(c) go back and forth and price discriminate
(d) sell only at the World Series for $20
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