Suppose Mary is willing to pay up to $15,000 for an used Ford pick-up truck. If she buys one for $12,000, her ______ would be ______.

Question

Quizplus · Accepted Answer

Mary's benefit is the most she is willing to pay, which is $15,000. Her cost is the actual price she pays, which is $12,000. Economic surplus is the benefit minus the cost, which is $3,000 ($15,000 - $12,000). Therefore, the best choice is C, economic surplus of $3,000, as it represents the additional benefit Mary received by buying the truck at a price below her maximum willingness to pay.

Suppose Mary Is Willing to Pay Up to $15,000 for an Used