A consumer values a car at $30,000 and a producer values the same car at $20,000.If the transaction is completed at $24,000,the transaction will generate:

Question

​A consumer values a car at $30,000 and a producer values the same car at $20,000.If the transaction is completed at $24,000,the transaction will generate:

Quizplus · Accepted Answer

The buyer's surplus is calculated by subtracting the actual price ($24,000) from the maximum amount the buyer is willing to pay ($30,000): $30,000 - $24,000 = $6,000. The seller's surplus is calculated by subtracting the actual price ($24,000) from the minimum amount the seller is willing to accept ($20,000): $24,000 - $20,000 = $4,000. Therefore, the transaction will generate $6,000 worth of buyer surplus and $4,000 of seller surplus.

​A Consumer Values a Car at $30,000 and a Producer

A Consumer Values a Car at $30,000 and a Producer