Question

Tim mows neighborhood lawns for extra money. Suppose that he would be willing to mow one lawn for ​$10​, a second lawn for ​$17​, and a third lawn for ​$23. Also suppose that three neighbors are interested in having their lawns mowed. Mrs. Jones would be willing to pay ​$34 to have her lawn​ mowed, Mr. Wilson would be willing to pay ​$​26, and Ms. Smith would be willing to pay ​$23

Answer 1

Unit	Willingness to Pay	Supply Price
1	34	10
2	26	17
3	23	23

Answer to situation 1:

(Refer to the table above) Here we assume that the Tim charges $23 for mowing a lawn thus the price is $23.

The producer surplus is the difference between the price that the producer is getting and the price that the producer is willing to receive (Supply Price). Thus, In this case the Producer surplus (PS) is:

Thus:

The consumer surplus is the difference between the price that the consumer is willing to pay (WP) and the price that the consumer is actually paying (Price=23). Thus, In this case the Consumer surplus (CS) is:

So, the total surplus (TS) will be:

Answer to situation 2:

(Refer to the table above) Here we assume that the Tim charges $17 for mowing a lawn thus the price is $17.

The producer surplus is the difference between the price that the producer is getting and the price that the producer is willing to receive (Supply Price). Thus, In this case the Producer surplus (PS) is:

Thus:

The consumer surplus is the difference between the price that the consumer is willing to pay (WP) and the price that the consumer is actually paying (Price=17). Thus, In this case the Consumer surplus (CS) is:

So, the total surplus (TS) will be:

Answer to situation 3:

(Refer to the table above) Here we assume that the Tim charges $14 for mowing a lawn thus the price is $14.

The producer surplus is the difference between the price that the producer is getting and the price that the producer is willing to receive (Supply Price). Thus, In this case the Producer surplus (PS) is:

Thus:

The consumer surplus is the difference between the price that the consumer is willing to pay (WP) and the price that the consumer is actually paying (Price=14). Thus, In this case the Consumer surplus (CS) is:

So, the total surplus (TS) will be:

Hope, I solved your query. Give good feedback.

Comment, I'll get back to you ASAP.

Stay safe. Thank you