Give proper Explanation of the answer Cathy is willing to pay$40for a subway and Aby is willing to pary only$35. The price of the subway is$30. Suppose Cathy manages to buy the last subway. However, for some teason, the restaurant decides to take the newly bought subway from Cathy, refund Cathy the price he paid and let Ally buy the subway at$30.a. the sum of consumer surplus and producer surplus increases. b. the producer surplus increases ic the consumer sieplus decreasets d. the consumer vurolus increases e. the produghr surplus decreases Clear my choice Cathy is willing to pay $40 for a subway and Ally is willing to pay only $35. The price of the subway is $30. Suppose Cathy manages to buy the last subway. However, for somereason, the restaurant decides to take the newly bought subway from Cathy, refund Cathy the price he paid and let Ally buy the subway at $30. As a result,Select onethe sum of consumer surplus and producer surplus increases.b the producer surplus increasesthe consumer surplus decreasesd. the consumer surplus increasese the producer surplus decreasesClear my choice.Check

Consumer surplus is the difference between maximum price consumer is willing to pay and actual pice…

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Cathy is willing to pay$40for a subway and Aby is willing to pary only$35. The price of the subway is$30. Suppose Cathy manages to buy the last subway. However, for some teason, the restaurant decides to take the newly bought subway from Cathy, refund Cathy the price he paid and let Ally buy the subway at$30.

a. the sum of consumer surplus and producer surplus increases. b. the producer surplus increases ic the consumer sieplus decreasets d. the consumer vurolus increases e. the produghr surplus decreases Clear my choice

Cathy is willing to pay $40 for a subway and Ally is willing to pay only $35. The price of the subway is $30. Suppose Cathy manages to buy the last subway. However, for some
reason, the restaurant decides to take the newly bought subway from Cathy, refund Cathy the price he paid and let Ally buy the subway at $30. As a result,
Select one
the sum of consumer surplus and producer surplus increases.
b the producer surplus increases
the consumer surplus decreases
d. the consumer surplus increases
e the producer surplus decreases
Clear my choice.
Check

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