Question

On a shopping trip, Melanie decided to buy a light blue coat made from woven fabric. A tag on the coat stated that the price was $79.95. When she brought the coat to the store's sales clerk, Melanie was told that the coat was on sale, and she would pay 20% less than the price on the tag. After the discount was applied, Melanie paid $63.36, $15.99 less than the original price. The value of Melanie's consumer surplus from this purchase is what?

Answer 1

Answer:

The value of Melanie's consumer surplus from this purchase is $15.99

Explanation:

The consumer surplus shows a difference between the cost price or maximum price of the product and the actual price which is paid by the customer

In mathematically,  

Consumer surplus = Maximum price - the actual price paid by the customer

                               = $79.95 - $63.36

                               = $15.99

The $15.99 denotes the consumer surplus