Assume that there are four consumers A, B, C, and D, and the prices that each of them is willing to
pay for a glass of lemonade is, respectively, $1.50, $1.20, $1.00, and $0.90. If the actual price of
lemonade is $1.00 per glass, then consumer surplus in this market will be $0.70.

Question

Quizplus · Accepted Answer

Consumer surplus is the difference between the maximum price a consumer is willing to pay and the actual price they pay. In this case, the consumer surplus for each individual is: 
A: $0.50 ($1.50 - $1.00) 
B: $0.20 ($1.20 - $1.00) 
C: $0.00 ($1.00 - $1.00) 
D: $0.00 ($0.90 - $1.00)

When we add these up, we get a total consumer surplus of $0.70, as stated. Therefore, the answer is true.

Assume That There Are Four Consumers A, B, C, and D