Arthur buys a new cell phone for $150. He receives consumer surplus of $150 from the purchase. How much does Arthur value his cell phone?

Question

Quizplus · Accepted Answer

Arthur values his cell phone at $300 because consumer surplus is the difference between what he is willing to pay and what he actually pays. Since he receives a consumer surplus of $150 and pays $150, he must value the phone at $300.

Arthur Buys a New Cell Phone for $150