If a buyer enjoys a consumer surplus of $25 when he purchases a good for $50,his willingness to pay for the good is ________.
A) $2
B) $25
C) $50
D) $75

Question

Quizplus · Accepted Answer

The formula for consumer surplus is the difference between willingness to pay (WTP) and the actual price paid (P).
Thus, WTP = P + consumer surplus
In this case, the consumer surplus is $25 and the actual price paid is $50.
So, WTP = $50 + $25 = $75. Hence, the answer is option D ($75).

If a Buyer Enjoys a Consumer Surplus of $25 When