when frank sells a pie to jean instead of sarah, the economic value created in society is lower because of the difference in

when frank sells a pie to jean instead of sarah, the economic value created in society is lower because of the difference in

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When Frank sells a pie to Jean instead of Sarah, the economic value created in society is lower because of the difference in consumer surplus. This happens because Sarah values the pie more than Jean, so the consumer surplus—the difference between what the consumer is willing to pay and what they actually pay—is higher with Sarah than with Jean. Hence, the economic value created is lower when the pie is sold to Jean instead of Sarah due to this difference in consumer surplus.

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