Question

Suppose the actual price for good a is $20. john is willing to pay $30, susie is willing to pay $28, joseph is willing to pay $25, jessica is willing to pay $23, and jeremy is willing to pay $21. what is total consumer surplus?

Answer 1

Answer: Total consumer surplus is $27

We calculate Consumer Surplus as follows:

$Consumer Surplus = Amount consumer is willing to pay - Price of the product$

We calculate Consumer Surplus for each person

Person                 Price Willing      Actual Price               Consumer Surplus

John                          30                      20                      $30 - 20 = 10$        

Susie                         28                      20                      $28 - 20 = 08$

Joseph                      25                      20                      $25 - 20 = 05$

Jessica                      23                     20                        $23 - 20 = 03$

Jeremy                      21                      20                        $21 - 20 = 01$

Total   Consumer Surplus                                                                27