Lauren and Katy each bought a new bike lock for $20.Both Lauren and Katy would have paid $25 for the lock.The total consumer surplus for Lauren and Katy taken together equaled
A) $15.
B) $10.
C) $40.
D) $20.
E) $50.

Question

Quizplus · Accepted Answer

Consumer surplus is the difference between what consumers are willing to pay and what they actually pay. Lauren and Katy each would have paid $25 but paid $20, so each has a consumer surplus of $5. Together, their total consumer surplus is $10.

Lauren and Katy Each Bought a New Bike Lock for $20.Both