If the Santiago family,which pays a charge of one cent a gallon,uses about 1,200 gallons of water a month,what is the most accurate statement we can make about their consumer surplus?
A)They definitely enjoy a consumer surplus.
B)They may or may not enjoy a consumer surplus.
C)They definitely do not enjoy a consumer surplus.

Question

Quizplus · Accepted Answer

The Santiago family pays less than the marginal cost of water, so they definitely enjoy a consumer surplus.

If the Santiago Family,which Pays a Charge of One Cent