Suppose Dan is willing to pay a maximum of $3,000 for a piano, but finds one he can buy for $2,500. Dan's consumer surplus from this piano is
A) $5,500.
B) $2,500.
C) $3,000.
D) $500.
E) zero because he buys the piano.

Question

Quizplus · Accepted Answer

Consumer surplus is the difference between the maximum amount a consumer is willing to pay and the actual price paid. In this case, Dan's consumer surplus is $3,000 (maximum amount he was willing to pay) - $2,500 (actual price paid) = $500 (consumer surplus). Therefore, the best choice is D.

Suppose Dan Is Willing to Pay a Maximum of $3,000