Table 7-1

-Refer to Table 7-1.If the table represents the willingness to pay of four buyers and the price of the product is $30,then their total consumer surplus is
A)$-10.
B)$-6.
C)$20.
D)$30.

Question

Table 7-1
 
-Refer to Table 7-1.If the table represents the willingness to pay of four buyers and the price of the product is $30,then their total consumer surplus is
A)$-10. 
B)$-6. 
C)$20. 
D)$30.

Quizplus · Accepted Answer

To calculate the total consumer surplus, we need to find the sum of the differences between each buyer's willingness to pay and the actual price of the product. The table shows that buyer A is willing to pay $50, buyer B is willing to pay $40, buyer C is willing to pay $30, and buyer D is willing to pay $20. Since the actual price of the product is $30, the consumer surplus for each buyer is:

- Buyer A: $50 - $30 = $20
- Buyer B: $40 - $30 = $10
- Buyer C: $30 - $30 = $0
- Buyer D: $20 - $30 = -$10

The total consumer surplus is the sum of these values, which is ($20 + $10 + $0 - $10) = $20. Therefore, the correct choice is C.

Table 7-1 -Refer to Table 7-1.If the Table Represents the Willingness to Represents