John's demand schedule for pizza is indicated below. If the current price of pizza is $1.10 per slice, what is John's consumer surplus if he buys five slices of pizza?
A)$0
B)$1.00
C)$1.10
D)$6.50

Question

John's demand schedule for pizza is indicated below. If the current price of pizza is $1.10 per slice, what is John's consumer surplus if he buys five slices of pizza? 
A)$0 
B)$1.00 
C)$1.10 
D)$6.50

Quizplus · Accepted Answer

To calculate consumer surplus, we first need to find the highest price that John is willing to pay for each slice of pizza. From the demand schedule, we can see that John is only willing to pay up to $1.80 for his first slice, up to $1.50 for his second slice, up to $1.30 for his third slice, up to $1.20 for his fourth slice, and up to $1.10 for his fifth slice. Since the current price is $1.10 and John is willing to pay $1.10 for his fifth slice, there is no consumer surplus for the fifth slice. However, John is only willing to pay up to $1.20 for his fourth slice, which means his consumer surplus for the fourth slice is $1.20 - $1.10 = $0.10. Continuing this process for each slice, we can calculate that John's total consumer surplus for five slices of pizza is $0.50 + $0.40 + $0.20 + $0.10 + $0.00 = $1.00. Therefore, the best choice is B, as John's consumer surplus is $1.00 if he buys five slices of pizza.

John's Demand Schedule for Pizza Is Indicated Below