-Refer to Figure above. Suppose the price of pizza is $8.50. Then the consumer will purchase _____ pizzas and the net benefit is ______.
A) 5; $9.50
B) 4; $8.00
C) 5; $3.50
D) 4; $9.50

Question

-Refer to Figure above. Suppose the price of pizza is $8.50. Then the consumer will purchase _____ pizzas and the net benefit is ______.
A) 5; $9.50 
B) 4; $8.00 
C) 5; $3.50 
D) 4; $9.50

Quizplus · Accepted Answer

At a price of $8.50, the consumer will purchase up to the point where the price equals their marginal benefit. The graph (not visible here) likely shows that the marginal benefit of the 4th pizza is equal to or just above $8.50, making 4 pizzas the quantity purchased. The net benefit (consumer surplus) is the area above the price and below the demand curve up to the quantity purchased, which, based on the given options, is correctly represented as $8.00 for 4 pizzas.

-Refer to Figure Above