✏ Consumer and Producer Surplus with Discrete Goods

✏ Tina has a small lawn mowing business as a side gig. Suppose that three neighbors with yards are interested in paying Tina’s company to mow their lawns. In particular, Mr. and Dr. Castellano would be willing to pay up to $30 to have Tina mow their lawn, Mr. Louis would be willing to pay up to S26 for Tina’s lawn mowing services; and Professor Davis and Mr. Davis would be willing to pay up to $25 to have her mow their lawn. Hiring people to mow the Castellano lawn will cost $17, to mow the Louis lawn will cost $18, and for the Davis lawn it will cost $24, because she will need to pay overtime. If Tina offers to mow each lawn for $25, what would be the total consumer surplus realized from the mowing?

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	Their valuation of the good = Willingness to Pay = Reservation Price = Demands Curve	Price they actually Pay	Individual CS
Castellano	$30	$25	$5
Louis	$26	$25	$1
Davis	$25	$25	$0

Therefore, the total $CS = \$5 + \$1 + \$0 = \$6$  ✅

✏ Tina has a small lawn mowing business as a side gig. Suppose that three neighbors with yards are interested in paying Tina’s company to mow their lawns. In particular, Mr. and Dr. Castellano would be willing to pay up to $30 to have Tina mow their lawn, Mr. Louis would be willing to pay up to S26 for Tina’s lawn mowing services; and Professor Davis and Mr. Davis would be willing to pay up to S25 to have her mow their lawn. Hiring people to mow the Castellano lawn will cost $17, to mow the Louis lawn will cost $18, and for the Davis lawn it will cost $24, because she will need to pay overtime. If Tina offers to mow each lawn for $25, what would be the total producer surplus realized over the three days of mowing?

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	Cost = Willingness to Sell = Supply Curve	Price they actually Pay	PS from sale
Castellano	$17	$25	$8
Louis	$18	$25	$7
Davis	$24	$25	$1

Therefore, the total $CS = \$8 + \$7 + \$1 = \$16$  ✅