Assume
that you were ready to buy a custom tailored Dress (or menâs suit) and
you are prepared to pay up to $200 for it. Also assume that the tailor
is prepared to sell that item of clothing for as little as $100.
When
you arrive at the tailor shop, the posted price for the item is $150.
Discuss how this scenario relates to producer and consumer surplus and
how such surpluses, if any, affect buying and manufacturing decisions
Discuss any recent purchases you have made and for which you feel that a similar rational seemed to be at work.
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- Australia uses British English spelling conventions
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