Elvis values the first gravy sandwich at $5, the second at $4.50, the third at $4.If he buys three for $4 each, his consumer surplus is
A)$5
B)$4
C)$1.50
D)$9.50
E)$12

Question

Quizplus · Accepted Answer

Consumer surplus is the difference between what a consumer is willing to pay and what they actually pay. Elvis values the sandwiches at $5, $4.50, and $4, totaling $13.50. He pays $12 for three sandwiches ($4 each), so his consumer surplus is $13.50 - $12 = $1.50.

Elvis Values the First Gravy Sandwich at $5, the Second