A market has four individuals considering buying a grill for his backyard.Further assume that grills come in only one size and model.Abe considers himself a grill-master,and finds a grill a necessity,so he is willing to pay $400 for a grill.Butch is a meat-lover,honing his grilling skills,and is willing to pay $350 for a grill.Collin just met the girl of his dreams,and she loves a good grilled steak,so in his effort to impress her he is willing to pay $320 for a grill.Daniel loves grilled shrimp and thinks it might be cheaper in the long run if he buys a grill instead of eating out every time he wants grilled shrimp,so he is willing to pay $200 for a grill.
If the market price of grills is $350,given the scenario described,total consumer surplus would be:
A)$50.
B)$750.
C)$400.
D)$870.

Question

Quizplus · Accepted Answer

Abe is the only one willing to pay $400, which is above the market price of $350. His consumer surplus is $400 - $350 = $50. Butch, Collin, and Daniel will not buy the grill as their willingness to pay is less than or equal to the market price. Thus, the total consumer surplus is $50.

A Market Has Four Individuals Considering Buying a Grill for His