Jack and Jill have started a pail factory after the only other pail factory in town burnt down and the owners decided to move to another town. The demand for pails is quite well established. No one would think of paying more than $12.00 for a pail and there is a limit as to how many pails can be sold in a day. You need to have two pails for each cow. In their town there are twelve cows. (There used to be thirteen but one jumped over the moon and hasn’t been seen since.) The cost per pail is set at $3.00 and they go up at a rate of $1.00 per pail produced. What is the consumer surplus, the producer surplus, the supplier surplus and the residual surplus in this market?
The new factory has a chance to adopt a new technology that produces plastic pails. The cost of materials for the first pail is the same as before but the increased cost per unit of production is now $.50 per unit. What is the impact (change) in each of the surpluses developed above.

The cow, which had previously been lost, has now been found. It appears, that it was betrayed by a little dog laughing at it. It has been returned to take its place in the milking rotation. What is the impact (change) on the surpluses developed above.