Question

Pietro estimated that a pair of Style King jeans would be worth 50 for its brand and durability. However, at the Style King store, the pair of jeans he wanted was available for 40. The difference of 10 in this scenario is referred to as the:__________

Answer 1

Answer:

Consumer Surplus

Explanation:

Consumer Surplus occurs when a expensive item is available at a discounted price in the market. The difference in price charged by the market and the discounted price of the similar product is customer surplus. In this question, the consumer surplus is:

Customer Surplus = $50 average price in the market - $40 Discounted Price

Customer Surplus =  $10