Donna can make a chair for about $100,she charges customers $150 to buy the chair,and customers perceive that the chair is worth $225.In this case,the consumer surplus is
A)$50.
B)$75.
C)$100.
D)$150.
E)$225.

Question

Quizplus · Accepted Answer

Consumer surplus is the difference between what a customer is willing to pay (their perceived value) and what they actually pay. In this case, the customer perceives the chair to be worth $225, but they only have to pay $150. Therefore, the consumer surplus is $225 - $150 = $75.

Donna Can Make a Chair for About $100,she Charges Customers