If the university president valued a parking space close to the administration building at $500 and paid $30 for a parking permit, he would receive consumer surplus equal to:
A) $30.
B) $470.
C) $500.
D) $530.

Question

Quizplus · Accepted Answer

Consumer surplus is the difference between the maximum amount a consumer is willing to pay for a good/service and the actual price paid. In this case, the university president is willing to pay $500 for a parking space close to the administration building but only pays $30 for a parking permit. Thus, the consumer surplus is $500 - $30 = $470.

If the University President Valued a Parking Space Close to the Administration