Welfare and Efficiency — End of Chapter Problem Fei, Morgan, and Lakesha are all in the...

Welfare and Efficiency — End of Chapter Problem

Fei, Morgan, and Lakesha are all in the market for new Levi’s jeans. The marginal benefit for each pair of jeans for each of them is provided in the accompanying table.

Quantity	Fei	Morgan	Lakesha
1	$85	$40	$90
2	$60	$32	$75
3	$32	$24	$55
4	$20	$16	$32
5	$15	$8	$25

a. If the price of a pair of Levi’s jeans costs $32, Fei will purchase

, Morgan will purchase

, and Lakesha will purchase

b. The consumer surplus from the last pair of jeans purchased is

largest for Lakesha.

largest for Fei.

the same for Fei, Morgan, and Lakesha.

largest for Morgan.

c. How much total consumer surplus will each of them receive at a price of $32?

Fei’s total consumer surplus is $

Morgan’s total consumer surplus is $

Lakesha’s total consumer surplus is $

d. How much consumer surplus do they receive collectively?

Collective consumer surplus is $

Solutions

Expert Solution

Rahul Sunny answered 1 month ago

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