Asked by Elizabeth McGee on Jun 12, 2024
Verified
Wendy is willing to pay $50 for a concert ticket and Bruce would like to receive $25. If the market price is $40 for this transaction, then the total surplus would be $15.
Total Surplus
The sum of consumer surplus and producer surplus; a measure of the overall benefit to society from the production and consumption of goods or services.
Market Price
The present cost at which a service or asset is available for purchase or sale in a specific market.
- Ascertain the total surplus value and grasp the allocation between producers and consumers.
Verified Answer
SC
Silvana CotrinaJun 13, 2024
Final Answer :
False
Explanation :
The total surplus is calculated as the difference between what the buyer is willing to pay and what the seller is willing to accept. Wendy is willing to pay $50, and Bruce wants $25. The total surplus is $50 - $25 = $25, not $15.
Learning Objectives
- Ascertain the total surplus value and grasp the allocation between producers and consumers.
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