a) How to draw the implied stair-case demand and supply curves? b) If the equilibrium price is $6 per driveway how many households would like their driveways shovelled and how many teenagers will be willing to shovel driveways?
Seven households on your street are interested in having their driveways shovelled, and their willingness to pay values (demand) are: $14, $12, $10, $8, $6, $4, $2. At the same time, each of six teenagers is willingness to shovel snow from one driveway each day. Their "willingness to shovel" valuations (supply) are: $2, $3, $4, $5, $6, and $7.
How to compute the consumer surplus and the producer surplus?
How much do households actually pay to have their driveways shovelled?
Seven households on your street are interested in having their driveways shovelled, and their willingness to pay values (demand) are: $14, $12, $10, $8, $6, $4, $2. At the same time, each of six teenagers is willingness to shovel snow from one driveway each day. Their "willingness to shovel" valuations (supply) are: $2, $3, $4, $5, $6, and $7.
How to compute the consumer surplus and the producer surplus?
How much do households actually pay to have their driveways shovelled?
1 Answer
Total Consumer's surplus is
Total Worker's surplus
Explanation:
Here -
The consumer's surplus is the difference between the price consumers is willing to pay and the equilibrium price.
Consumer's surplus for the first person
Consumer's surplus for the second person
Consumer's surplus for the third person
Consumer's surplus for the fourth person
Consumer's surplus for the fifth person
Total Consumer's surplus is
The worker's surplus is the difference between the equilibrium price and the price teenager is willing to accept.
Worker's surplus for the first person
Worker's surplus for the second person
Worker's surplus for the Third person
Worker's surplus for the fourth person
Worker's surplus for the fifth person
Total Worker's surplus
How much do households actually pay to have their driveways shovelled?
Households actually pay to have their driveways shovelled
What is the value of household's total willingness to pay?
The value of household's total willingness to pay