A new car has a sticker price of $24,000.Fred decides that he will pay no more than $23,000 for this car.He bought the car for $21,000.Fred obtains a consumer surplus of
A)$23,000.
B)$21,000.
C)$3,000.
D)$1,000.
E)$2,000.

Question

Quizplus · Accepted Answer

Consumer surplus is the difference between the maximum price a consumer is willing to pay for a product and the actual price paid. In this case, Fred was willing to pay a maximum of $23,000 but paid only $21,000, so his consumer surplus is $23,000 - $21,000 = $2,000. Therefore, the correct choice is E.

A New Car Has a Sticker Price of $24,000