Josh is willing to pay $40 for a haircut,but he is able to pay $25 at the local salon.His consumer surplus is
A) $0 because the cost exceeds his maximum willingness to pay.
B) $15.
C) $25.
D) $65.

Question

Quizplus · Accepted Answer

Josh's consumer surplus is the difference between his maximum willingness to pay ($40) and the price he actually pays ($25).

Consumer surplus = Maximum willingness to pay - Price paid 
Consumer surplus = $40 - $25 
Consumer surplus = $15

Therefore, the best choice is B) $15.

Josh Is Willing to Pay $40 for a Haircut,but He