Four people each have a different willingness to pay for one unit of a good: George will pay $15, Glen will pay $12, Tom will pay $10, and Peter will pay $8. If price is equal to $9 per unit then the quantity demanded in the market will be _______ and the consumer surplus for this unit will be
_______.
A) 4; $8
B) 3; $10
C) 3; $37
D) 3; $36

Question

Quizplus · Accepted Answer

At a price of $9, George, Glen, and Tom will buy the good (since their willingness to pay is at or above $9), but Peter will not (since his willingness to pay is below $9). This results in a quantity demanded of 3. The consumer surplus is the difference between what consumers are willing to pay and what they actually pay. For George, it's $6 ($15 - $9), for Glen, it's $3 ($12 - $9), and for Tom, it's $1 ($10 - $9), totaling $10 ($6 + $3 + $1).

Four People Each Have a Different Willingness to Pay for One