Question

Amanda buys a ruby for $330 for which she was willing to pay $340. The minimum acceptable price to the seller, Tony, was $140. Amanda experiences:

a. a producer surplus of $200, and Tony experiences a consumer surplus of $10.
b. a consumer surplus of $10, and Tony experiences a producer surplus of $190.
c. a consumer surplus of $670, and Tony experiences a producer surplus of $200.
d. a producer surplus of $10, and Tony experiences a consumer surplus of $190.

Answer 1

Answer: a consumer surplus of $10 and Tony a producer surplus of $190

Explanation:

Answer 2

Amanda experiences a consumer surplus of $10 and Tony experiences a producer surplus of $190.

Consumer surplus = willingness to pay – price of the good

$340 - $330 = $10

Producer surplus = price – least price the seller is willing to accept

$330 - $140 = $190

What is consumer and producer surplus?

Surplus is something that is in excess of what you need. An example of surplus goods are items you do not need and have no use for. There are two types of economic surplus: consumer surplus and producer surplus:-

• Consumer surplus is the difference between the willingness to pay of a consumer and the price of the good.

• Producer surplus is the difference between the price of a good and the least price the seller is willing to sell the product.

Therefore, (b) option is the correct answer.

To learn more about Surplus,refer here :

https://brainly.com/question/25541622

#SPJ2