This table refers to five possible buyers' willingness to pay for a take-away meal. ?

$\begin{array}{|l|l|}
\hline \text { Buyer } & \begin{array}{l}
\text { Willingness To } \
\text { Pay }
\end{array} \
\hline \text { David } & € 8.50 \
\hline \text { Laura } & € 7.00 \
\hline \text { Megan } & € 5.50 \
\hline \text { Mallory } & € 4.00 \
\hline \text { Audrey } & € 3.50 \
\hline
\end{array}$
?
Refer to the table above. If the market price is €5.50, the consumer surplus in the market will be
?
A) €3.00.
B) €4.50.
C) €15.50.
D) €21.00.

Question

This table refers to five possible buyers' willingness to pay for a take-away meal. ?

$\begin{array}{|l|l|}
\hline \text { Buyer } & \begin{array}{l}
\text { Willingness To } \
\text { Pay }
\end{array} \
\hline \text { David } & € 8.50 \
\hline \text { Laura } & € 7.00 \
\hline \text { Megan } & € 5.50 \
\hline \text { Mallory } & € 4.00 \
\hline \text { Audrey } & € 3.50 \
\hline
\end{array}$
?
Refer to the table above. If the market price is €5.50, the consumer surplus in the market will be
?
A) €3.00.
B) €4.50.
C) €15.50.
D) €21.00.

Quizplus · Accepted Answer

Consumer surplus is the difference between the maximum amount that buyers are willing to pay for a good or service and the actual market price. 
In this case, the buyer with the highest willingness to pay is David at €8.50. However, the market price is only €5.50. Therefore, David's consumer surplus is €3.00 (€8.50 - €5.50 = €3.00).
Laura's willingness to pay is €7.00, and she only has to pay €5.50 in the market. Therefore her consumer surplus is €1.50 (€7.00 - €5.50 = €1.50). 
Similarly, Megan's, Mallory's, and Audrey's consumer surplus at the market price of €5.50 are €0, as they are willing to pay less than the market price. 
The total consumer surplus in the market is the sum of individual consumer surpluses, which is €3.00 + €1.50 + €0 + €0 + €0 = €4.50. Therefore, the correct answer is B.

This Table Refers to Five Possible Buyers' Willingness to Pay