Table: Maximum Willingness to Pay $$\begin{array} { l c }
\hline \text { Name } & \begin{array} { c }
\text { Willingness to pay } \
\text { for 1 lb of bananas }
\end{array} \
\hline \text { Jill } & \$ 2.00 \
\text { Joe } & 1.25 \
\text { Jane } & 0.75 \
\text { James } & 0.25 \
\hline
\end{array}$$ The table shows four individuals' maximum willingness to pay for one pound of bananas. If the market price of bananas is $0.50/lb, what is the total consumer surplus in the market?

Question

Table: Maximum Willingness to Pay $$\begin{array} { l c } 
\hline \text { Name } & \begin{array} { c } 
\text { Willingness to pay } \
\text { for 1 lb of bananas }
\end{array} \
\hline \text { Jill } & \$ 2.00 \
\text { Joe } & 1.25 \
\text { Jane } & 0.75 \
\text { James } & 0.25 \
\hline
\end{array}$$ The table shows four individuals' maximum willingness to pay for one pound of bananas. If the market price of bananas is $0.50/lb, what is the total consumer surplus in the market?

Quizplus · Accepted Answer

Consumer surplus is calculated as the difference between what consumers are willing to pay and the market price. Jill's surplus is $1.50, Joe's is $0.75, Jane's is $0.25, and James has no surplus. Total surplus is $1.50 + $0.75 + $0.25 = $2.50.

Table: Maximum Willingness to Pay The Table Shows Four Individuals' Maximum Willingness to Pay for \hline

Table: Maximum Willingness to Pay The Table Shows Four Individuals' Maximum Willingness to Pay for
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