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Jennifer buys a piece of costume jewelry for $30, for which she was willing to pay $35. The minimum acceptable price to the seller, Nathan, was $15. Jennifer experiences a
A) consumer surplus of $15, and Nathan experiences a producer surplus of $20.
B) producer surplus of $5, and Nathan experiences a consumer surplus of $15.
C) producer surplus of $65, and Nathan experiences a producer surplus of $50.
D) consumer surplus of $5, and Nathan experiences a producer surplus of $15.
E) consumer surplus of $5, and Nathan experiences a consumer surplus of $5.
Consumer Surplus
The difference between the total amount that consumers are willing and able to pay for a good or service and the total amount that they actually do pay.
Producer Surplus
The difference between what producers are willing to accept for a good or service and the actual price they receive, reflecting producers' benefit.
Costume Jewelry
Fashionable jewelry made from non-precious materials, intended for temporary use with specific outfits rather than as long-term investments.
- Calculate and understand consumer surplus and producer surplus from transactions.
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Learning Objectives
- Calculate and understand consumer surplus and producer surplus from transactions.
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