Question

Suppose the actual price for good a is $20. john is willing to pay $30, susie is willing to pay $28, joseph is willing to pay $25, jessica is willing to pay $23, and jeremy is willing to pay $21. what is total consumer surplus?

Answer 1

Answer: Total consumer surplus is $27

We calculate Consumer Surplus as follows:

`Consumer Surplus = Amount consumer is willing to pay - Price of the product`

We calculate Consumer Surplus for each person

Person Price Willing Actual Price Consumer Surplus

John 30 20
`30 - 20 = 10`

Susie 28 20
`28 - 20 = 08`

Joseph 25 20
`25 - 20 = 05`

Jessica 23 20
`23 - 20 = 03`

Jeremy 21 20
`21 - 20 = 01`

Total Consumer Surplus 27