Suppose that a customer's willingness-to-pay for a product is $120, and the seller's willingness-to-sell is $110. If the negotiated price is $119, how much is consumer surplus?

Question

Quizplus · Accepted Answer

Consumer surplus is the difference between what a consumer is willing to pay and what they actually pay. Here, the consumer is willing to pay $120 but pays $119, so the consumer surplus is $1.

Suppose That a Customer's Willingness-To-Pay for a Product Is $120