Identify whether each of the following statements best illustrates the concept of consumer surplus, producer surplus, or neither.

Statement Consumer Surplus Producer Surplus Neither

a. Even though I was willing to pay up to $59 for a used textbook, I bought a used textbook for only $54.
b. I sold a used laptop for $180 on eBay last week. This week, someone offered me $32 for it.
c. I sold a jersey sweater for $30, even though I was willing to go as low as $25 in order to sell it.

Consumer surplus; Neither; Producer surplus

Explanation:

Consumer Surplus is the difference between the price a consumer wants to pay for a good or service and the price the consumer eventually ends up paying for the good. Graphically, the consumer surplus it is the area that is under the demand curve and also above the price.

Producer Surplus is the difference between the price of a good or service that a producer is willing to take from the consumer who purchases the good and the price the producer ends up getting from the consumer. Graphically, the producer surplus is the area that is above the supply curve and which is below the price.

a. In this case, consumer surplus for you will be $59 - $54 = $ 5. The consumer is willing to pay $59 but ends up paying $54, so there's a consumer surplus of $5.

b. This is neither consumer surplus or producer surplus. The used laptop had already been sold.

c. In this case, the producer surplus will be $30 - $25= $5. The producer is willing to collect $25 but ends up collecting $30. There's a producer surplus of $5.

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