Question

you are moving across town. doing your research, you find that the average rate of a moving company is $250 per hour for a moving crew (moving truck included). the marginal benefit you receive from each hour of the movers' time (and truck) is listed in the accompanying table.

Answer 1

Based on the information given, the marginal cost of the price that should be paid is $250 per hour.

This is an incomplete information. From the complete information, the number of moving crew will be gotten where the marginal cost is equal to the marginal benefit and this will be at the 4th hour. Therefore, the marginal cost and benefit equal $250.

Therefore, one should hire movers for 4 hours. Therefore, based on the information given, the consumer surplus will be:

= $600 + $370 + $250

= $1220

In conclusion, the total consumer surplus for hiring a crew for 4 hours will be $1220.

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