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, consumer surplus is $9.

Question

Quizplus · Accepted Answer

The consumer surplus can be calculated as the difference between the willingness-to-pay and the actual price paid. In this case, the consumer's willingness-to-pay is $120 and the negotiated price is $119, so the consumer surplus should be $1, not $9. Therefore, the statement is false.

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