Read and consider the “Willingness to Pay” example in Section 7-1 (Chapter 7 Section 1).
Your family has outgrown the house you now live in. You paid $350,000 for the house you are now in and you have a budget of $450,000 for a larger house. You shop around in several towns and you find one being sold by a builder for $460,000. That builder bought the house for $300,000 and spent $75,000 remodeling it. You and the builder settle on a price of $410,000.
Please find and evaluate the:
Willingness to pay,
Consumer surplus,
Demand,
Producer surplus,
Cost and,
Willingness to sell of your own example.
Sample Solution