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Assume Allison, Bob, and Charisse are the only three buyers of oranges, and only three oranges can be supplied per day.
Refer to Table 7-5. If the market price of an orange is $0.65, then consumer surplus amounts to <u>$3.60</u>
<h3>What
is consumer surplus?</h3>
Consumers' surplus is a measure of consumer welfare and is defined as the excess of social valuation of product over the price actually paid. It is measured by the area of a triangle below a demand curve and above the observed price. Since there is willingness to pay.
Therefore, the correct answer is as given above.
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The complete question goes thus:
For each of three potential buyers of oranges, the table displays the willingness to pay for the first three oranges of the day. Assume Allison, Bob, and Charisse are the only three buyers of oranges, and only three oranges can be supplied per day.
Refer to Table 7-5. If the market price of an orange is $0.65, then consumer surplus amounts to________
Answer:
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