Suppose Kim is willing to pay $5 for her first ice cream sundae, $4 for a second ice cream sundae, and $2 for a third. If Kim is able to buy all three ice cream sundaes for $2 each, she has realized a consumer surplus of
A)$3.
B)$5.
C)$2.
D)$1.
E)$4.

Question

Quizplus · Accepted Answer

Kim's consumer surplus is calculated by subtracting the total amount she actually pays from the total amount she was willing to pay. She was willing to pay $5 + $4 + $2 = $11 for three sundaes, but she only pays $2 + $2 + $2 = $6. Therefore, her consumer surplus is $11 - $6 = $5.

Suppose Kim Is Willing to Pay $5 for Her First