Asked by Keyara Lewis on May 10, 2024
Verified
Refer to Table 7-6. The price that Harry paid for a latte on the first day is
A) $3.5.
B) $5.
C) $0.
D) $5.5.
Consumer Surplus
The divergence in the anticipated price for a good or service by consumers and the actual price they pay.
Willingness to Pay
The maximum amount a consumer is prepared to spend on a good or service, reflecting the perceived value of the good or service to the consumer.
- Absorb the concept of consumer surplus and master the technique for calculating it.
Verified Answer
RD
Robbie DombrowskiMay 15, 2024
Final Answer :
A
Explanation :
Consumer surplus is the difference between what a consumer is willing to pay and what they actually pay. On the first day, Harry's willingness to pay was $5.50, and his consumer surplus was $2.00. Therefore, the price paid was $5.50 - $2.00 = $3.50.
Learning Objectives
- Absorb the concept of consumer surplus and master the technique for calculating it.