Consumer and Producer Surplus

4.1. Answer to Try It

• a consumer surplus of $2,500.00.
  Correct. The difference between what Kay is willing to pay and what he actually pays is his consumer surplus: ($25,000 - $22,500 = $2,500)
• a producer surplus of $2,500.00.
  Incorrect Kay is not a producer but a consumer and therefore the difference between what Kay is willing to pay and what he actually pays is his consumer surplus.
• a social surplus of $25,000.00.
  Incorrect Kay is not a producer but a consumer and therefore the difference between what Kay is willing to pay and what he actually pays is his consumer surplus.