Question

Denise values a stainless steel dishwasher for her new house at $500. The actual price of the dishwasher is $650. Denise A. buys the dishwasher, and on her purchase she experiences a consumer surplus of $-150. B. buys the dishwasher, and on her purchase she experiences a consumer surplus of $150. C. does not buy the dishwasher, and on her purchase she experiences a consumer surplus of $0. D. does not buy the dishwasher, and on her purchase she experiences a consumer surplus of $150.

Answer 1

Answer:

C. does not buy the dishwasher, and on her purchase she experiences a consumer surplus of $0.

Explanation:

A consumer surplus is the difference between what a consumer pays for an item and what they are willing to pay. In this case Denise is willing to pay $500 and pays $650. The amount she pays is more than she is willing to pay hence her consumer surplus can't be negative. This means it will be 0.