Andy purchased a new drone last year for $1,000. He no longer uses the drone and...

 

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Andy purchased a new drone last year for $1,000. He no longer uses the drone and wants to sell it. He currently values the drone at $300. Suppose Jeff wants to purchase a drone. His maximum willingness to pay for a drone is $1,200. Instructions: Enter your answers as a whole number. Suppose Andy and Jeff agree on a price of $1,000 for the drone. a. How much producer surplus will this transaction generate? $ b. How much consumer surplus will this transaction generate? $ c. What will be the total surplus generat from this transaction? Andy purchased a new drone last year for $1,000. He no longer uses the drone and wants to sell it. He currently values the drone at $300. Suppose Jeff wants to purchase a drone. His maximum willingness to pay for a drone is $1,200. Instructions: Enter your answers as a whole number. Suppose Andy and Jeff agree on a price of $1,000 for the drone. a. How much producer surplus will this transaction generate? $ b. How much consumer surplus will this transaction generate? $ c. What will be the total surplus generat from this transaction?

Answer rating: 100% (QA)

a Producer surplus is the difference between the price at which the producer is willing to s... View the full answer