Answer:
a. Michelle's consumer surplus: $3.5
b. Paul's Cafe and Bakery producer surplus: $3.5
Explanation:
This one is simple I attached a graphic so you can understand me better:
The consumer surplus is just the difference between the price payed and the price willed to pay by the consumer, in this case the price payed was $4.25 but Michelle was willing to pay up to $7.75 so we just substract this numbers
7.75 - 4.25 = 3.5
Same for the producer surplus which is the difference between the price the consumer pay and the price that the producer was willing to accept.
4.25 - 0.75 = 3.5
