Scenario 12-1
Suppose Jim and Joan receive great satisfaction from their consumption of cheesecake.Joan would be willing to purchase only one slice and would pay up to $6 for it.Jim would be willing to pay $9 for his first slice,$7 for his second slice,and $3 for his third slice.The current market price is $3 per slice.
-Refer to Scenario 12-1.How much total consumer surplus do Joan and Jim collectively receive from consuming cheesecake?
A) $3
B) $6
C) $9
D) $13

Question

Quizplus · Accepted Answer

To calculate consumer surplus, we need to find the difference between the maximum price the consumer is willing to pay and the actual market price.

For Joan: 
Consumer Surplus = Maximum Price – Market Price = $6 - $3 = $3

For Jim: 
Consumer Surplus for the first slice = Maximum Price – Market Price = $9 - $3 = $6 
Consumer Surplus for the second slice = Maximum Price – Market Price = $7 - $3 = $4 
Consumer Surplus for the third slice = Maximum Price – Market Price = $3 - $3 = $0

Total Consumer Surplus = $3 + $6 + $4 + $0 = $13.

Therefore, Joan and Jim collectively receive a total consumer surplus of $13 from consuming cheesecake. Answer choice D is the correct option.

Scenario 12-1 Suppose Jim and Joan Receive Great Satisfaction from Their Consumption