Respuesta :
The change in total surplus that arises due to trades between TIMBER and the tows is equal to zero
What is total surplus?
A market's overall surplus serves as a gauge for the general well-being of all members. Combined consumer and producer surplus make up this amount. Consumer surplus is the gap between what customers are prepared to pay and what they actually pay for a good.
Entire benefits minus total expenses can be used to compute total market surplus. The area between our marginal benefit and marginal cost, limited by quantity, is another option. Finding the difference between marginal benefits and marginal costs at each level of production is equal to doing this.
There is no commerce since the price of wood is more than what the market will bear. In order for trade to take place, either some of the participants will boost their demand and accept the price of $60 and then search for a different supplier, or consider producing for themselves. Timber may also drop the price of the wood so that trade takes place.
The complete question is written below.
Learn more about surplus on:
https://brainly.com/question/14673389
#SPJ1
Suppose that towns collect resources from their surroundings. Then, through trade, they attempt to obtain other desirable items. Porterville, an urban town that specializes in brick and ore, wants the wood to build roads so that it can expand and connect to other major cities. Porterville has the willingness to pay $ 50 $50 for wood since wood is hard for them to obtain. Mayfair also needs wood to build grain silos for their wheat harvests. Mayfair is willing to pay $ 45 $45 for wood. Timber, the only foresting company, sets the price of wood at $ 60 $60. The change in total surplus that arises due to trades between TIMBER and the tows is________.
-less than zero
-equal to zero
-greater than zero
