Question

Determine the amount of consumer surplus generated in each of the following situations. a. Leon goes to the clothing store to buy a new T-shirt, for which he is willing to pay up to $10. He picks out one he likes with a price tag of exactly $10. When he is paying for it, he learns that the T-shirt has been discounted by 50%. $ b. Alberto goes to the music store hoping to find a used copy of Nirvana’s Nevermind for up to $30. The store has one copy of the record selling for $30, which he purchases. $ c. After soccer practice, Stacey is willing to pay $2 for a bottle of mineral water. The 7-Eleven sells mineral water for $2.25 per bottle, so she declines to purchase it.

Answer 1

a) It ends up paying $5 but he was willing to pay up to $10

the difference is $10 - $5 = $5 dollars

b) zero as it purchase at the exact amount it was willing to obtain the T-shirt

c) none, as the trasnsaction do not occur there can't be any surplus.

Step-by-step explanation:

the consumer surplus is the amount the difference betwene the amount the consumer was willing to purchase the good or service and the actual market price ofthe transaction.