Suppose that Irina is prepared to pay a maximum of $2.40 for her first glass of cranberry juice,but for each subsequent glass she is only prepared to pay 20 cents less than the previous one.
-What is the correct formula for MCS (marginal consumer surplus)?
A)$MU-price.
B)Price-$MU.
C)$TU-price.
D)$\Delta$TU/price.
E)$\Delta$TU/$\Delta$quantity.

Question

Quizplus · Accepted Answer

Marginal consumer surplus (MCS) is the difference between what a consumer is willing to pay for an additional unit of a good (marginal utility or MU) and the price of that good. Therefore, the correct formula is $MU - price.

Suppose That Irina Is Prepared to Pay a Maximum of $2.40