Colleen is getting ready to go for a medical procedure in two days. To prepare for this, she desires a massage from Jen. Jen values her time at $60 per hour. She spends 2 hours giving Colleen a massage. Coleen was willing to pay $300 for her massage, but they negotiate a price of $200.
Calculate and explain the Consumer Surplus in this scenario
Calculate and explain the Producer Surplus in this scenario.
How has the society’s welfare improved in this case?
Graphically, show how we can maximize social welfare and explain the concept of efficiency.
what I don't understand is how has the society's welfare improved in this case. I also don't understand how to explain the concept of efficiency as this case is concerned.