Table 4-2

-Refer to Table 4-2.The table above lists the highest prices five consumers are willing to pay for a concert ticket.If the price of one ticket rises from $20 to $38
A)only three tickets will be sold.
B)consumer surplus decreases from $62 to $12.
C)consumer surplus increases from $88 to $142.
D)no one will buy a ticket.

Question

Table 4-2
 
-Refer to Table 4-2.The table above lists the highest prices five consumers are willing to pay for a concert ticket.If the price of one ticket rises from $20 to $38
A)only three tickets will be sold. 
B)consumer surplus decreases from $62 to $12. 
C)consumer surplus increases from $88 to $142. 
D)no one will buy a ticket.

Quizplus · Accepted Answer

Consumer surplus is the difference between the highest price a consumer is willing to pay and the actual price paid. If the price of one ticket rises from $20 to $38, only two consumers (Consumer 1 and Consumer 2) will still be willing to buy a ticket. Their consumer surplus will decrease from $42 and $20 respectively to $2 each, totaling $4 in consumer surplus. Therefore, the total consumer surplus will decrease from $62 to $12.

Table 4-2 -Refer to Table 4-2.The Table Above Lists the Highest Prices