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rafiki121 rafiki121
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2 weeks ago
Consumer Surplus and Pricing

The table shows the willingness to pay for five consumers in the market for dog collars.
ConsumerHighest Price Willing to Pay
Antwone21​
Nevaeh16​
Valentina11​
Matias6​
Rudra1​
What is the consumer surplus when the price is $16? When the price is $5.5?

▸ $5.00, $32.00

▸ $5.00, $30.00

▸ $18.50, $30.00

▸ $18.50, $32.00
Textbook 
Macroeconomics

Macroeconomics


Edition: 3rd
Authors:
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omolola69omolola69
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$5.00, $32.00

Consumer surplus is the difference between the highest price a consumer is willing to pay for a good and the actual price the consumer pays.

At $16, only Antwone and Nevaeh purchase dog collars, so:
Consumer surplus = (Antwone - 16) + (Nevaeh - 16) = (21 - 16) + (16 - 16) = $5.00

At $5.5, Antwone, Nevaeh, and Valentina purchase dog collars, so:
Consumer surplus = (Antwone - 5.5) + (Nevaeh - 5.5) + (Valentina - 5.5) = (21 - 5.5) + (16 - 5.5) + (11 - 5.5) = $32.00
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rafiki121 Author
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2 weeks ago
Thank you, thank you, thank you!
husne
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Yesterday
Thanks
IvanaVR
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2 hours ago
Smart ... Thanks!
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