Question

babysits on the weekends for extra money. Suppose that three neighbors with children are interested in paying Elizabeth to babysit their children. In​ particular, Mr. and Dr. Brown would be willing to pay ​$31 to have Elizabeth babysit their​ children, Mr. Smith would be willing to pay ​$28 for Elizabeth​'s babysitting​ services, and Professor Jones and Mr. Jones would be willing to pay ​$22 to have her watch their children. If Elizabeth offers to babysit each set of children for an evening for ​$22​, what will be consumer​ surplus, considering the three sets of children​ combined? ​$nothing. ​(Enter your response using an integer.​)

Answer 1

Answer:

$15

Explanation:

Consumer surplus is the price the consumer pay for good/service minus the amount the consumer is willing to pay for it.

✓Mr. and Dr. Brown would be willing to pay ​$31

✓Mr. Smith would be willing to pay ​$28

✓Professor Jones and Mr. Jones would be willing to pay ​$22

Elizabeth PRICE for babysitting each set of children for an evening = $22

Consumer surplus= Σ (price that the consumer is willing to pay- Price of the good/service is sold)

= [(31-22)+(28-22)+(22-22)]

= 9+6+0

=$15

Hence, Consumer surplus is $15