Question

How much consumer surplus will she enjoy? Assume that the student will purchase bags up to, but not including, the point at which she incurs a loss of consumer surplus. $ in consumer surplus.

Answer 1

Answer:

The student must purchase the number of items in which the price exceeds the ability of the student to pay.

The number of bags he will purchase at the price of $4, is 2, because the willingness to purchase is $4.

The solution is therefore 2 sachets of jelly beans.

Whenever the student eats 2 bags of jelly beans at $4, the consumer surplus is determined as follows;

Consumer Surplus

= ($5-$4) + ($4-$4)

= $1.