For the following scenario, calculate the surplus and indicate if it is a producer surplus or a consumer surplus. alice is willing to spend $30 on a pair of jeans, and has a coupon for $10 off she found online. she selects and purchases a $35 pair of jeans, pre-discount.
alice's
a) consumer
b) producer

a) consumer

$5

Explanation:

Consumer surplus is the difference between the willingness to pay of a consumer and the price of the good.

Willingness to pay is the highest amount a consumer would be willing to pay for a product. The willingness to pay in this question is $30.

The price of the goods is $35 but Alice would pay ($35 - $10) = $25

The consumer surplus is $30 - $25 = $5

Producer surplus is the difference between the price of a product and the lowest price a supplier would be willing to sell his product.

I hope my answer helps you.

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