Question

Jonathan purchased coffee for $5 at Jennifer's coffee shop; however, he was willing to pay $9. Jennifer was willing to accept $3 for the coffee. The results of this transaction are a consumer surplus of:

Answer 1

$4

Step-by-step explanation:

Consumer surplus refers to the difference between the price of a product that a consumer is willing to pay and the amount he actually paid for the product.

Given that,

Actual amount paid coffee = $5

Consumer's willingness to pay for the coffee = $9

Seller's willingness to accept for the coffee = $3

Therefore,

Consumer surplus:

= Consumer's willingness to pay for the coffee - Actual amount paid coffee

= $9 - $5

= $4