A grocery store sells 6 bottles of water for $4 and 18 bottles of water for $10. Which is the better deal and why?
1 answer:
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Answer:
$4
Step-by-step explanation:
Total consumer surplus is given by the difference between the willingness to pay of each customer to the actual price of a good.
Since Avery is only willing to pay $10 and the pizza costs $12, Avery will not buy a pizza and should not be considered for consumer surplus.
Since Pia is willing to pay $13, and Sylvio is willing to pay $15, consumer surplus is:
When the price of pizza is $12, a consumer surplus of $4 is achieved.