Vonda and Aleiyah are shopping together at the mall for new jeans. Vonda is willing to pay $90 and Aleiyah is willing to pay $50

Question

3 years ago

15

for a pair of jeans. What is the gain in total consumer surplus when the price decreases from $59 to $40?
a. $60b. $10c. $31d. $29

1 answer:

Gala2k [10] · Answer 1 · 2022-02-16T04:22:28+03:00

Answer:

A. $60

Explanation:

Recall that, consumer's surplus refers to the price that a consumer is willing to pay less the amount he or she actually pays.

Thus

Consumer surplus = maximum price willing to pay - actual market price.

Given that

Market price = $40

Vonda is willing to pay = $90

Aleiyah is willing to pay = $50

Hence.

Vonda consumer surplus = 90 - 40

= $50

Aleiyah consumer surplus = 50 - 40

= $10.

Total consumer surplus = 50 + 10

= $60.