Asked by Jaida McNair on May 14, 2024
Verified
Charlie is willing to pay $10 for a T-shirt that is priced at $9. If Charlie buys the T-shirt, then his consumer surplus is
A) $19.
B) $0.90.
C) $90.
D) $1.
Consumer Surplus
Consumer Surplus is the difference between what consumers are willing to pay for a good or service and what they actually pay, representing the benefit consumers receive from a transaction.
- Gain an understanding of the consumer surplus concept and its computation process.
Verified Answer
SD
Sairik Das - The Knowledge HubMay 17, 2024
Final Answer :
D
Explanation :
Consumer surplus is the difference between what a consumer is willing to pay and the market price of the good. Charlie is willing to pay $10 but pays $9, so his consumer surplus is $1.
Learning Objectives
- Gain an understanding of the consumer surplus concept and its computation process.