Question

Deltra was willing to purchase a dozen cookies for $60 that Deirdre was willing to sell for anything more than $32. If they agreed on a price of $36, how much total value was created in this exchange?

Answer 1

Calculation of the total value created in exchange is as shown below:-

Deltra Surplus is

$purchase value - Agreed Price$

$=\$ 60-\$ 36$

=$24

Deirdre Surplus is

= $Agreed Price -Willing to sell$

$=\$ 36 - \$ 32$

=$4

Now total value created is

$Deltra surplus +Deirdre surplus$

$=\$ 24+\$ 4$

=$28