Suppose that michelle buys a cappuccino from paul\'s cafe and bakery for $6.25. michelle was willing to pay up to $8.75 for the cappuccino and paul\'s cafe and bakery was willing to accept $2.25 for the cappuccino. based on this information, answer the questions below. a)michelle\'s consumer surplus is equal to? b) paul\'s bakery\'s producer surplus is equal to?

consumer surplus = $2.25

producer surplus = $4

Explanation:

given data

market price = $6.25

willing to pay = $8.75

willing to accept =  $2.25

to find out

consumer surplus and producer surplus

solution

first we get  here consumer surplus that is express as

consumer surplus = willing to pay - market price    1

put here value we get

consumer surplus = $8.75  - $6.25

consumer surplus = $2.25

and

producer surplus will be here as

producer surplus = willing to accept - market price    2

put here value we get

producer surplus = $2.25 - $6.25

producer surplus = $4

answer/// randomly assign the participants to the   conditions