Serena paid $900 for a camera that she thought was worth $1100 for all the features included in it. For the consumer electronics firm selling the camera, however, the cost of producing the camera was only $350. What is the consumer surplus in this scenario?
A) $900
B) $1,100
C) $550
D) $200

Question

Quizplus · Accepted Answer

Consumer surplus is the difference between the value a consumer attaches to a good or service (V), and what he or she pays for it (P), or (V - P), that is, $1100 - $900 = $200.

Serena Paid $900 for a Camera That She Thought Was