Tim mows neighborhood lawns for extra money. Suppose that he would be willing to mow one lawn for $14, a second lawn for $17, and a third lawn for $24. Also suppose that three neighbors are interested in having their lawns mowed. Mrs. Jones would be willing to pay $33 to have her lawn mowed, Mr. Wilson would be willing to pay $26, and Ms. Smith would be willing to pay $24.

If Tim offers to mow lawns for $24 each, what will be his producer surplus?

Considering Mrs. Jones, Mr. Wilson, and Ms. Smith together, what will be their consumer surplus?

Question

Tim mows neighborhood lawns for extra money.  Suppose that he would be willing to mow one lawn for ​$14​, a second lawn for ​$17​, and a third lawn for ​$24.  Also suppose that three neighbors are interested in having their lawns mowed.  Mrs. Jones would be willing to pay ​$33 to have her lawn​ mowed, Mr. Wilson would be willing to pay ​$26​, and Ms. Smith would be willing to pay ​$24.

If Tim offers to mow lawns for ​$24 ​each, what will be his producer​ surplus?

Considering Mrs.​ Jones, Mr.​ Wilson, and Ms. Smith​ together, what will be their consumer​ surplus?

slenderman · Answer

Tim would be able to mow all three lawns at a price of $23, because all three of his neighbors would be willing to pay at least that much. Tim would receive a total of $23 x 3, or $69 for mowing the three lawns. 

Tim's "supply curve" would be: he would be willing to mow three lawns for a total of 
$13 + $19 + $23, or $55. 

He receives $69 for something that he would be willing to do for $55, so his producer surplus would be $14.