Julie plans to start a pet-sitting service. She surveyed her neighborhood to determine the demand for this service. Assume that each person surveyed demands only one hour of pet sitting services per period. Table 15-6 above shows a portion of her survey results.
-Refer to Table 15-6. Suppose Julie's marginal cost of providing this service is constant at $7 and she charges $7. What is the value of the consumer surplus enjoyed by her customers?

Question

Quizplus · Accepted Answer

Consumer surplus is the difference between what consumers are willing to pay and what they actually pay. Since Julie charges $7, which is her constant marginal cost, customers who were willing to pay more than $7 for the service enjoy a surplus. Without the specific values from Table 15-6, we can't calculate the exact amount, but based on the given choices, the correct answer is provided as $11.

Julie Plans to Start a Pet-Sitting Service