Question

Would you please help me ? Thanks in advance

You have four essentially identical extra tickets to the Midwest Regional Sweet 16 game in the men’s basketball tournament. The table shows the willingness to pay of the four potential buyers in the market for a ticket to the game.

Buyer Willingness to Pay
Michael $500
Earvin $400
Larry $350
Charles $300

1. If you offer to sell the tickets for $300, who will purchase the good?
a.Michael only
b.Michael and Earvin only
c.Earvin only
d.The four buyers will purchase the good.

Answer 1

D

Step-by-step explanation:

Willingness to pay is the highest amount a consumer is willing to pay for a good or service. A consumer would purchase a good as long as price is equal to or less than their willingness to pay.

Consumer surplus is the difference between the willingness to pay of a consumer and the price of the good.

Consumer surplus = willingness to pay – price of the good

People would purchase a good as long as consumer surplus is positive or zero

Michael = $500 - $300 = $200

Earvin = $400 - $300 = $100

Larry = $350 - $300 = $50

Charles = $300 - $300 = 0