Gehrig is willing to pay $90 for a cap made of raccoon skin.Suppose he finds such a cap for $71 on eBay.If Gehrig buys the cap for $71,he will have an individual consumer surplus of $71.

Question

Quizplus · Accepted Answer

Individual consumer surplus is the difference between the maximum amount a consumer is willing to pay for a good or service (in this case, $90) and the actual price paid (in this case, $71). Therefore, the individual consumer surplus for Gehrig would be $19 ($90 - $71), not $71.

Gehrig Is Willing to Pay $90 for a Cap Made