Changes

6. Suppose you decide you could profitably set the price for a homeschool dance at $15 per ticket, and it would have attracted 150 people. You also determine that 50 out of the 150 people who would have attended would have paid $20 per ticket and 10 out of the 150 would have paid $25 per ticket, and 5 out of the 150 would have paid $30 per ticket, because they would have enjoyed and benefited so much from it. However, the homeschool dance was never held because no one "got around to it." What is the loss in wealth or consumer surplus due to the fact that the event was not held?

6. Suppose you decide you could profitably set the price for a homeschool dance at $15 per ticket, and it would have attracted 150 people. You also determine that 50 out of the 150 people who would have attended would have paid $20 per ticket and 10 out of the 150 would have paid $25 per ticket, and 5 out of the 150 would have paid $30 per ticket, because they would have enjoyed and benefited so much from it. However, the homeschool dance was never held because no one "got around to it." What is the loss in wealth or consumer surplus due to the fact that the event was not held?

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:The consumer surplus is the excess benefit that people obtained above the price that they paid (or, in this case, would have paid).  Thus the consumer surplus that would have occurred is 50 persons times ($20-$15=$5 each) plus 10 times ($25-$15=$10 each) plus 5 times ($30-$15=$15), which equals $250 plus $100 plus $75, which equals $425.  By not holding the event, this wealth was lost.  (Instructor)

7. Is there perfect competition between homeschooling and public schools? If not, explain the imperfections.

7. Is there perfect competition between homeschooling and public schools? If not, explain the imperfections.