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.
Given the scenario described,if the market price of grills falls from $395 to $340,then we can say:
A) Abe's consumer surplus increases from $5 to $60,and total consumer surplus increases from $5 to $70.
B) Abe's consumer surplus decreases from $60 to $5,and total consumer surplus decreases from $70 to $5.
C) Collin's consumer surplus increases from $0 to $20,and total consumer surplus increases from $5 to 70.
D) Butch's consumer surplus decreases from $10 to $0,and total consumer surplus increases from $10 to $80.
Correct Answer:
Verified
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