The Tables Below Show Reservation Values of Buyers and Sellers

question 26

Multiple Choice

The tables below show reservation values of buyers and sellers in a market. There are three buyers and two sellers. Each buyer's reservation values for the fourth unit and above are negative, and each seller can produce at most four units.

-Refer to the tables above.Suppose that the price is $34 per unit.What is the sum of the three buyers' surplus? What is the sum of the two sellers' surplus? What is the social surplus?

• A) Sum of buyers' surplus = $77; Sum of sellers' surplus = $115; Social surplus = $187
• B) Sum of buyers' surplus = $92; Sum of sellers' surplus = $95; Social surplus = $187
• C) Sum of buyers' surplus = $66; Sum of sellers' surplus = $105; Social surplus = $171
• D) Sum of buyers' surplus = $108; Sum of sellers' surplus = $78; Social surplus = $186

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