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Danny Devito paid $40 to buy a new toothbrush, but was willing to pay $50. When Danny Devito's friend, Owen Wilson, learns that Danny bought a new toothbrush, he asks Danny if he'd be willing to sell it for $65 and Danny agrees. Owen is so excited because he would have paid $90 for the toothbrush. Danny is also pretty excited about the extra cash he made.
What is the consumer surplus from the original purchase and the additional surplus generated by the resale of the toothbrush?
What's Danny's original consumer surplus?
What is Danny's producer surplus from the resale?
What is Owen's consumer surplus from the resale?
What is the toal surplus generated from the resale?
The feedback from your instructor and your peers will help you narrow down your choice to one organization for the next module.
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