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Elanso [62]
3 years ago
11

If Avery is willing to pay $10 for a pizza, Pia is willing to pay $13, and Sylvio is willing to pay $15, how much consumer surpl

us is achieved when the price of pizza is $12?
Mathematics
1 answer:
Mrrafil [7]3 years ago
4 0

Answer:

$4

Step-by-step explanation:

Total consumer surplus is given by the difference between the willingness to pay of each customer to the actual price of a good.

Since Avery is only willing to pay $10 and the pizza costs $12, Avery will not buy a pizza and should not be considered for consumer surplus.

Since Pia is willing to pay $13, and Sylvio is willing to pay $15, consumer surplus is:

S = (\$13-\$12)+(\$15-\$12)\\S=\$4

When the price of pizza is $12, a consumer surplus of $4 is achieved.

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