Kevin Williamson goes to a local coffee shop and orders a medium-sized latte. His willingness to pay for that latte is $6. The price of the latte is $2. The cost to the coffee shop to produce the latte is $1. How much economic surplus does the coffee shop receive when Kevin purchases the latte?
A)$6
B)$4
C)$2
D)$1

Question

Quizplus · Accepted Answer

The economic surplus for the coffee shop is the difference between the price Kevin pays ($2) and the cost to produce the latte ($1), which is $1.

Kevin Williamson Goes to a Local Coffee Shop and Orders