Asked by lyndsey holder on Jul 22, 2024
Verified
Suppose you pay $10 to see Ryan Reynolds in his next movie.Suppose Mr.Reynolds receives $31 million to work in this movie.This means that:
A) you would have been better off being more self-reliant in the movie market.
B) Ryan Reynolds received a producer surplus of $31 million.
C) you received a consumer surplus of $10.
D) you and Ryan Reynolds benefited from this transaction.
Producer Surplus
The difference between what producers are willing to sell a good for and the actual price they receive, representing the additional benefit or surplus enjoyed by producers due to market conditions.
Consumer Surplus
The difference between what consumers are willing to pay for a good or service and what they actually pay, representing the economic benefit to consumers.
Ryan Reynolds
A Canadian actor, producer, and entrepreneur known for his performance in various films and co-owner of Aviation American Gin.
- Evaluate the influence of price alterations on consumer surplus and the aggregate surplus in the marketplace.
- Acquire knowledge about the attainment of market equilibrium and its impact on total surplus.
Verified Answer
JR
Jannella RodriguezJul 26, 2024
Final Answer :
D
Explanation :
Both parties benefited from the transaction. Ryan Reynolds received a high payoff for his work in the movie, indicating he valued his time and talent more than the $31 million he received. As a consumer, you enjoyed seeing Ryan Reynolds in the movie and valued the experience at least $10, indicating that you received a consumer surplus. Therefore, both parties benefited and were better off due to this transaction.
Learning Objectives
- Evaluate the influence of price alterations on consumer surplus and the aggregate surplus in the marketplace.
- Acquire knowledge about the attainment of market equilibrium and its impact on total surplus.