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 decides to charge each customer according to his or her willingness to pay. What is the value of consumer surplus by her customers?

Question

Quizplus · Accepted Answer

When Julie charges each customer according to his or her willingness to pay, consumer surplus is eliminated because each customer pays exactly what they value the service at, leaving no surplus value.

Julie Plans to Start a Pet-Sitting Service