Table 12-3

-Refer to Table 12-3.Assume that the price of a weekend ski pass is $38 and that the price reflects the actual unit cost of providing a weekend of skiing.How much consumer surplus accrues to Allyn and Greg individually?
A) $37 and $17 respectively
B) $47 and $27 respectively
C) $49 and $35 respectively
D) $85 and $65 respectively

Question

Table 12-3
 
-Refer to Table 12-3.Assume that the price of a weekend ski pass is $38 and that the price reflects the actual unit cost of providing a weekend of skiing.How much consumer surplus accrues to Allyn and Greg individually?
A) $37 and $17 respectively 
B) $47 and $27 respectively 
C) $49 and $35 respectively 
D) $85 and $65 respectively

Quizplus · Accepted Answer

To calculate consumer surplus, we need to find the difference between the maximum price that each consumer is willing to pay and the actual price they pay. 
For Allyn:
Maximum price she is willing to pay = $85 (from the highest reservation price in the table)
Consumer surplus = $85 - $38 = $47
For Greg:
Maximum price he is willing to pay = $65 (from the second highest reservation price in the table)
Consumer surplus = $65 - $38 = $27
Therefore, the total consumer surplus for Allyn and Greg individually is $47 and $27 respectively, which corresponds to choice B.

Table 12-3 -Refer to Table 12-3.Assume That the Price of a Weekend