What is the lowest hourly wage at which you would be willing to spend 10 hours per week at a retail sales job during the school year?

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Presentation transcript:

What is the lowest hourly wage at which you would be willing to spend 10 hours per week at a retail sales job during the school year?

A demander with Buyer Value $50 buys an object from a supplier with Seller Cost $20. The sum of the buyer’s and the seller’s profit : A. depends on the price. Higher price means larger sum. B. is the same at all prices between $20 and $50. C. depends on the price. Lower price means smaller sum. D.None of the above.

Why is that? Buyer’s profit=BV-Price Seller’s Profit =Price –SC Buyers Profit +Seller’s profit= (BV-Price)+(Price-SC)=BV-SC So sum of buyer’s and seller profit is BV-SC regardless of price.

iPod Demand Curve

iPhone Demand Curve Quantity Price

Homework exercise Results of surveys are posted in Excel file Use this information to answer questions posed there. Write down your answer. We will ask for answers with clickers next week.

And on to our main lecture…