Suppose you sell a kayak for $600, but you were willing to sell it for $450. The buyer was willing to pay $650. The total surplus is $200.

Question

Quizplus · Accepted Answer

The total surplus is the sum of the consumer surplus and the producer surplus. The consumer surplus is the difference between what the buyer was willing to pay ($650) and what they actually paid ($600), which is $50. The producer surplus is the difference between what the seller actually received ($600) and what they were willing to accept ($450), which is $150. Adding these together, $50 (consumer surplus) + $150 (producer surplus) = $200 (total surplus).

Suppose You Sell a Kayak for $600, but You Were