Question

Arthur buys a new cell phone for $150. He receives consumer surplus of $150 from the purchase. What value does Arthur place on his cell phone

Answer 1

Answer:

$300

Explanation:

Customer surplus may be explained as the additional benefit a customer earns over and above the amount paid. In other words, the amount paid is less than the amount customer is willing to pay for a certain product, hence. The additional benefit derived from paying less is the consumer surplus.

Therefore ;

Consumer surplus = Value - amount paid

From the question :

Consumer surplus = $150

Amount paid = $150

Hence,

Value = Consumer surplus + Amount paid

Value = $150 + $150

Value = $300