Essay
Determine the amount of producer surplus generated in each of the following situations.
a.Gordon lists his old electric train set for sale on an online auction.He sets a minimum acceptable price,known as his reserve price,of $75.After five days of bidding,the final high bid is exactly $75.He accepts the bid.
b.Francis advertises his car for sale online for $5000,but he is willing to sell the car for any price higher than $2500.The best offer he gets is $2200,which he declines
c.Lewis plays the organ during the Calgary Flames' home games and he likes his job so much that he would be willing to do it for free.However,his annual salary is $30,000.
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a. Gordon will receive no producer surp...View Answer
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