(Table: Marginal Benefit, Cost, and Consumer Surplus) The table Marginal Benefit, Cost, and Consumer Surplus shows six consumers' willingness to pay (his or her individual marginal benefit) for one iTunes download of a Jack Johnson song.If the marginal social cost is constant at ________, then consumers will purchase this good and consumer
Surplus is _.
A)$5; three; $30
B)$4; four; $18
C)$5; two; $37
D)$4; four; $34

Question

Quizplus · Accepted Answer

The marginal social cost is constant at $4. At a price of $4, four consumers will purchase the good, resulting in a total consumer surplus of $18 ($5 + $4 + $3 + $2 - $4 = $10 for the first four consumers, plus $8 for the fifth and sixth consumers). At any higher price, some consumers will not purchase the good and total consumer surplus will decrease.

(Table: Marginal Benefit, Cost, and Consumer Surplus) the Table Marginal