Tim mows neighborhood lawns for extra money. suppose that he would be willing to mow one lawn for $10, a second lawn for $15, and a third lawn for $21. also suppose that three neighbors are interested in having their lawns mowed. mrs. jones would be willing to pay $30 to have her lawn mowed, mr. wilson would be willing to pay $26, and ms. smith would be willing to pay $21.
if tim offers to mow lawns for $21 each, what will be his producer surplus? considering mrs. jones, mr. wilson, and ms. smith together, what will be their consumer surplus?

The producer surplus will be $17.

The consumer surplus will be $14.

Explanation:

The producer surplus is the difference between the minimum price a producer is willing to accept and the price he actually gets.

The consumer surplus is the difference between the maximum price a consumer is willing to pay for a product and the price it actually gets.

The price for mowing lawns is $21.

Producer surplus

= ($21 - $10) + ($21 - $15) + ($21 - $21)

= $11 + $6 + $0

= $17

Consumer surplus

= ($30 - $21) + ($26 - $21) + ($21 - $21)

= $9 + $5 + $0

= $14

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Explanation: