Judy Carl has been eyeing for weeks a Prada handbag (made in Milan, Italy) in the store window at Neiman-Marcus. She is willing to pay $250 for it (a birthday gift for herself,she rationalizes) if the price ever came down to that. Well, she is in luck! It goes on salefor $200, down from $325. She rushes in to make the purchase. She not only gets the handbag, but also a consumer surplus of

Question

Quizplus · Accepted Answer

Consumer surplus is the difference between what a consumer is willing to pay and what they actually pay. Judy was willing to pay $250 but paid $200, so her consumer surplus is $50.

Judy Carl Has Been Eyeing for Weeks a Prada Handbag