Problem
Four teenagers live on your street. Each is willing to shovel snow from one driveway each day. Their "willingness to shovel" valuations (supply) are: Jean, $10; Kevin, $9; Liam, $7; Margaret, $5. Several households are interested in having their driveways shoveled, and their willingness to pay values (demand) are: Jones, $8; Kirpinsky, $4; Lafleur, $7.50; Murray, $6.
(a) Draw the implied supply and demand curves as step functions.
(b) How many driveways will be shoveled in equilibrium?
(c) Compute the maximum possible sum for the consumer and supplier surpluses.
(d) If a new (wealthy) family arrives on the block, that is willing to pay $12 to have their driveway cleared, recompute the answers to parts (a), (b), and (c).
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.