Asked by Cristina Rodriguez on May 05, 2024
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(Table: Pumpkin Market) There are two consumers,Andy and Ben,in the market for pumpkins.Their willingness to pay for each pumpkin is shown in the table Pumpkin Market.There are two producers of pumpkins,Cindy and Diane,and their costs are also shown.The equilibrium price for pumpkins is $8 and the equilibrium quantity is 5.If Cindy sells one fewer pumpkin and Diane sells one more pumpkin than in equilibrium,total surplus will _____ by _____.
A) increase;$16
B) increase;$14
C) decrease;$1
D) decrease;$2
Total Surplus
The sum of consumer surplus and producer surplus in a market, representing the total net benefit to society.
Equilibrium Price
The price at which the quantity of a good demanded by consumers equals the quantity supplied by producers, leading to market stability.
Equilibrium Quantity
The amount of goods or services that are bought and sold at the equilibrium price, where market demand meets market supply.
- Derive the total, consumer, and producer surplus from defined market examples.
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Learning Objectives
- Derive the total, consumer, and producer surplus from defined market examples.
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