Consumers surplus and the producer surplus earned

Assignment Help Business Economics

Reference no: EM13795994

Toys are produced by a competitive industry. Santa Claus gives away one million free toys each year. It costs Santa nothing to produce these toys.

Illustrate Santa’s effect on consumer’s surplus and the producer surplus earned by commercial toy manufacturers. (Hint: Remember that the toys Santa distributes are free.)

According to your graph, how much does Santa add to social welfare? Explain why this answer may overestimate the true social value of Santa Claus. (Hint: How does Santa decide who gets the toys?)

Reference no: EM13795994

Questions Cloud

Benefits of outsourcing to low labor cost countries : Was Balagny Clothing Company better off keeping its operations within the US? Why more manufacturing companies are beginning to relocate to the US after enjoying the benefits of outsourcing to low labor cost countries? What are the determinants of pr..

Approach in international marketing and advertising : What is the programmed management approach in international marketing and advertising? How are Kraft Heinz, P&G, Nestle and Starbucks are handing this?

Firms production function : Prove that the firm has decreasing returns to scale. Theresa received an order for 5000 units. Find the optimal K/L ratio, as a function of w/r. Next, assuming w = $20 and r = .10, solve for Ki*, Li*, and qi*. Then draw a graph, showing the isoquant ..

Define the various aspects of decision making : How can you systematically detect bias in your own decisions and biases in others. What is the five-step process that will assist you with adjusting the decisions of others. Describe.

Consumers surplus and the producer surplus earned : Toys are produced by a competitive industry. Santa Claus gives away one million free toys each year. It costs Santa nothing to produce these toys. Illustrate Santa’s effect on consumer’s surplus and the producer surplus earned by commercial toy manuf..

Write a paper about the chris arnolds given article : Write a paper about the article "Economists Say Millennials Should Consider Careers In Trades" by Chris Arnold.

Problems based on source of the pollutants. : What steps are in place to eliminate the pollutant or to mitigate harm from the pollutant?

Rapid prototyping software costs : XYZ rapid prototyping (RP) software costs $20,000, lasts one year and will be expensed (i.e., written off in one year) . The cost of the upgrades will increase 10 % per year starting at the beginning of year two. How much can be spent now for an RP s..

Higher interest rates can be caused by : Higher interest rates can be caused by

User Account

All Pages