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 shoes is $65. What is the combined amount of consumer surplus for Jena and Jane?

a. $130
b. $10
c. $30
d. $215

Answer 1

The correct option is c.$30

Step-by-step explanation:

In this question, we use the formula of the consumer surplus. The formula is shown below:

Consumer surplus = maximum price willing to pay - actual price

So,

For Jena, the consumer surplus would be equal to

= $75 - $65

=$10

For Jane, the consumer surplus would be equal to

= $85 - $65

=$20

So, the total consumer surplus would be

= Jena consumer surplus + Jane consumer surplus

= $10 + $20

= $30

Hence, the combined amount of consumer surplus for Jena and Jane is $

30

Therefore, the correct option is c.$30