Question

In the market for a particular pair of shoes, jena is willing to pay $75 for a pair, while jane is willing to pay $85 for a pair. the actual price that each has to pay for a pair of these shoes is $65. what is the total amount of the two girls' combined consumer surplus?

Answer 1

To solve for the consumer surplus, the formula is;

Consumer surplus = total value – actual value

If jena is willing to pay for $75 then = $75 – $65 = $10

If Jane on the other hand is willing to pay for $85 then = $85 - $65 = $20

To combine the amount of Jena and Jane to be able to get both of their consumer surplus,

= $10 + $20 = $30

The combined amount of consumer surplus of Jena and Jane is $30.