Table: Consumer Surplus and Phantom Tickets Student Jessica Jacquelyn Willingnes
ID: 1122968 • Letter: T
Question
Table: Consumer Surplus and Phantom Tickets Student Jessica Jacquelyn Willingness to Pay $150 125 105 Brad Robert 25 Reference: Ref 4-2 (Table: Consumer Surplus and Phantom Tickets) The table shows Consumer Surplus and Phantom Tickets each student's willingness to pay for a Phantom of the Opera ticket. Assume that each student wants to buy one ticket. If the box office price of a ticket to see Phantom of the Opera is $50 and there is no other market for tickets, the total consumer surplus for the five students is A. $175. B. $230. C. $100. D. $240.Explanation / Answer
ANSWER:
CONSUMER SURPLUS IS THE DIFFERENCE BETWEEN THE CUSTOMERS WILLINGNESS TO PAY FOR THE PRODUCT OR SERVICE AND THE PRICE OF THE PRODUCT OR SERVICE.
CONSUMER SURPLUS OF JESSICA = $150 - $50 = $100
CONSUMER SURPLUS OF JACQUELYN = $125 - $50 = $75
CONSUMER SURPLUS OF BRAD = $105 - $50 = $55
CONSUMER SURPLUS OF ROBERT = $60 - $50 = $10
GWEN HAS NO CONSUMER SURPLUS BECAUSE HIS WILLINGNESS TO PAY IS LESS THEN THE PRICE OF THE TICKET AND THEREFORE HE WON'T BE PURCHASING THE TICKET.
TOTAL CONSUMER SURPLUS = $100 + $ 75 + $55 + $10 = $240
HENCE THE CORRECT OPTION IS D.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.