The amount of
a). Gordon lists his old Lionel electric trains on eBay. He sets a minimum acceptable price, known as his reserve price, of $75. After five days of building, the final high bid is exactly $75. He accepts the bid.
b). So-Hee advertises her car for sale in the used-car section of the student newspaper for $2000 but she is willing to sell the car for any price higher than $1500. The best offers she gets is $1200, which she declines.
c). Sanjay likes his job so much that he would be willing to do it for free. However, his annual salary is $80,000.
Concept Introduction:
It is defined as the difference between consumer’s
Producer Surplus:
It is defined as the difference between the amount a producer of a good receives and the minimum amount the producer is willing to accept for the good. It is the area below the price level and above the supply curve.
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