Table 7-5
For each of three potential buyers of oranges,the table displays the willingness to pay for the first three oranges of the day.Assume Alex,Barb,and Carlos are the only three buyers of oranges,and only three oranges can be supplied per day.

-Refer to Table 7-5.If the market price of an orange is $1.20,consumer surplus amounts to

Question

Table 7-5
For each of three potential buyers of oranges,the table displays the willingness to pay for the first three oranges of the day.Assume Alex,Barb,and Carlos are the only three buyers of oranges,and only three oranges can be supplied per day.
 
-Refer to Table 7-5.If the market price of an orange is $1.20,consumer surplus amounts to

Quizplus · Accepted Answer

To calculate consumer surplus, we need to find the area below the demand curve and above the market price. For Alex, the consumer surplus is (3-1.20) x 1/2 = $0.90. For Barb, the consumer surplus is (2.50-1.20) x 1/2 = $0.65. For Carlos, the consumer surplus is (1.80-1.20) x 1/2 = $0.30. Adding these up, we get a total consumer surplus of $0.90 + $0.65 + $0.30 = $1.85. Therefore, the correct choice is C, $1.40.

Table 7-5 For Each of Three Potential Buyers of Oranges,the Table Displays