-Refer to Table 4 -1. The table above lists the highest prices three consumers, Farouk, Mohamed and Aliaa, are willing to pay for a short -sleeved polo shirt. If the price of one of the shirts is US$28 dollars
A) Farouk will receive US$12 of consumer surplus from buying one shirt.
B) Farouk and Mohamed receive a total of US$70 of consumer surplus from buying one shirt each. Aliaa will buy no shirts.
C) Aliaa will receive US$25 of consumer surplus since she will buy no shirts.
D) Farouk will buy two shirts, Mohamed will buy one shirt and Aliaa will buy no shirts.

Question

-Refer to Table 4 -1. The table above lists the highest prices three consumers, Farouk, Mohamed and Aliaa, are willing to pay for a short -sleeved polo shirt. If the price of one of the shirts is US$28 dollars
A) Farouk will receive US$12 of consumer surplus from buying one shirt. 
B) Farouk and Mohamed receive a total of US$70 of consumer surplus from buying one shirt each. Aliaa will buy no shirts. 
C) Aliaa will receive US$25 of consumer surplus since she will buy no shirts. 
D) Farouk will buy two shirts, Mohamed will buy one shirt and Aliaa will buy no shirts.

Quizplus · Accepted Answer

Farouk's consumer surplus is the difference between the highest price he is willing to pay and the actual price of the shirt. If he is willing to pay $40 and the shirt costs $28, his consumer surplus is $40 - $28 = $12.