Fitness is a magazine for women about health and exercise. Fitness offers year subscriptions for $12 on their website. Jess, Ania, Mandy, and Chloe exercise together and each enjoy reading Fitness. Jess is willing to pay $10, Ania is willing to pay $16, Mandy is willing to pay $24, and Chloe is willing to pay $12 for a subscription to the magazine. What is the value of market consumer surplus?

Question

Quizplus · Accepted Answer

Consumer surplus is the difference between what consumers are willing to pay and what they actually pay. Ania has a surplus of $4 ($16 - $12), Mandy has a surplus of $12 ($24 - $12), and Chloe has no surplus ($12 - $12). Jess does not purchase as she is not willing to pay the subscription price. The total consumer surplus is $4 + $12 = $16.

Fitness Is a Magazine for Women About Health and Exercise