The accompanying table shows the supply and demand schedules for used copies of the third edition of this textbook. The supply schedule is derived from offers at Amazon.com. The demand schedule is hyp

a. The equilibrium price is where the quantity supplied equals the quantity demanded. In this case, the equilibrium price is $75, where 14 books are demanded and 6 books are supplied. Consumer surplus is the difference between the willingness to pay for a book and the actual price paid. For buyers who purchased a book at the equilibrium price of $75, their willingness to pay ranged from $80 to $55, resulting in a consumer surplus of $5 to $20 per book. The total consumer surplus is the sum of these individual surpluses, which is $135. Producer surplus is the difference between the market price and the minimum price at which each book was supplied. For sellers who sold a book at the equilibrium price of $75, their minimum acceptable price ranged from $70 to $55, resulting in a producer surplus of $0 to $20 per book. The total producer surplus is the sum of these individual surpluses, which is $60. b. With a $20 decrease in willingness to pay, the demand schedule shifts leftward by 20 units at each price point. Price of book | Quantity of books demanded | Quantity of books supplied ---------------|---------------------------|--------------------------- $55 | 30 | 0 $60 | 15 | 1 $65 | 5 | 3 $70 | -3 | 3 $75 | -6 | 6 $80 | -8 | 9 $85 | -10 | 10 $90 | -12 | 18 $95 | -14 | 22 $100 | -16 | 31 $105 | -18 | 37 $110 | -20 | 42 The new equilibrium price is $65, where 5 books are demanded and 3 books are supplied. Consumer surplus is now the difference between the willingness to pay for a book and the actual price paid. For buyers who purchased a book at the new equilibrium price of $65, their willingness to pay ranged from $70 to $45, resulting in a consumer surplus of $5 to $20 per book. The total consumer surplus is the sum of these individual surpluses, which is $75. Producer surplus is now the difference between the market price and the minimum price at which each book was supplied. For sellers who sold a book at the new equilibrium price of $65, their minimum acceptable price ranged from $60 to $55, resulting in a producer surplus of $0 to $10 per book. The total producer surplus is the sum of these individual surpluses, which is $15.