If Niki is willing to pay up to $5 for an ice-cream bar but she actually pays $2 for it. The consumer surplus of the ice-cream bar for Niki
A)is $2.
B)is $3.
C)is $7.
D)cannot be determined without information about the market structure.

Question

Quizplus · Accepted Answer

Consumer surplus is the difference between the maximum price that a consumer is willing to pay and the actual price paid. Here, Niki is willing to pay up to $5 for the ice-cream bar, but she only pays $2. Therefore, her consumer surplus is $5-$2=$3.

If Niki Is Willing to Pay Up to $5 for an Ice-Cream