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Assume all benefits accrue to the buyer and all costs are borne by the seller. Prof....

Assume all benefits accrue to the buyer and all costs are borne by the seller.

Prof. G. has 1 ticket to 4 different Raptors games. If he does not sell them, they will not be used by him or anyone else. (That is, his supply of Raptors tickets in perfectly inelastic at Q=4.)

Mirwan's demand is given by the following table:

Qd P
1 $18
2 $15
3 $10
4 $6

Zhuncheng's demand is given by the following table:

Qd P
1 $11
2 $7
3 $3
4 $1

If these tickets are efficiently allocated, how much surplus is created?

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Answer #1

If tickets are efficiently allocated then 3 tickets will be sold to Mirwan and 1 ticket to Zhunchengs

total surplus=(18-4)+(15-4)+(10-4)+(11-4)=14+11+6+7=38

Thus surplus of 38 is created

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