Scenario 8-1
Erin would be willing to pay as much as $100 per week to have her house cleaned. Ernesto's opportunity cost of cleaning Erin's house is $70 per week.
-Refer to Scenario 8-1.If Erin pays Ernesto $80 to clean her house,Erin's consumer surplus is

Question

Quizplus · Accepted Answer

Erin's maximum willingness to pay is $100 and Ernesto's opportunity cost is $70. Therefore, the price that is agreeable to both is $70. However, Erin is willing to pay up to $100 meaning if she pays $80, her consumer surplus would be $20 ($100-$80).

Scenario 8-1 Erin Would Be Willing to Pay as Much as $100