(Figure: Monthly Demand for Ice Cream Cones)The graph Monthly Demand for Ice Cream Cones shows one individual's linear monthly demand for ice cream cones.At $5 per cone,this individual will consume 10 cones in a month.How much consumer surplus does this consumer receive?
A)$100
B)$50
C)$150
D)$500

Question

(Figure: Monthly Demand for Ice Cream Cones)The graph Monthly Demand for Ice Cream Cones shows one individual's linear monthly demand for ice cream cones.At $5 per cone,this individual will consume 10 cones in a month.How much consumer surplus does this consumer receive? 
A)$100 
B)$50 
C)$150 
D)$500

Quizplus · Accepted Answer

The consumer surplus is the area below the demand curve and above the price paid. At $5 per cone, the consumer would be willing to pay up to $7.50 for the 10th cone. Therefore, the consumer surplus is ($7.50 - $5) x 10 = $25 for the month. Since the graph is linear, the consumer surplus would be the same for any given month. Thus, the total consumer surplus for the year would be $25 x 12 = $300. However, the question only asks for the consumer surplus for one month, which is $25 or $5 per cone. The closest option is B, $50.

(Figure: Monthly Demand for Ice Cream Cones)The Graph Monthly Demand