When the Smiths were shopping for their present home, the asking price from the previous owner was $250,000. The Smiths had decided they would pay no more than $245,000 for the house. After negotiations, the Smiths actually purchased the house for $239,000. They therefore enjoyed a consumer surplus of

Question

Quizplus · Accepted Answer

Consumer surplus is the difference between what consumers are willing to pay and what they actually pay. The Smiths were willing to pay $245,000 but paid $239,000, resulting in a consumer surplus of $6,000.

When the Smiths Were Shopping for Their Present Home, the Asking