Table 16-1
Julie plans to start a pet-sitting service.She surveyed her neighborhood to determine the demand for this service.Assume that each person surveyed demands only one hour of pet sitting services per period.Table 16-1 below shows a portion of her survey results.
-Refer to Table 16-1.Suppose Julie's marginal cost of providing this service is constant at $7 and she charges $7.What is the value of the consumer surplus enjoyed by her customers?
A)$39
B)$28
C)$11
D)$0

Question

Table 16-1
  Julie plans to start a pet-sitting service.She surveyed her neighborhood to determine the demand for this service.Assume that each person surveyed demands only one hour of pet sitting services per period.Table 16-1 below shows a portion of her survey results.
-Refer to Table 16-1.Suppose Julie's marginal cost of providing this service is constant at $7 and she charges $7.What is the value of the consumer surplus enjoyed by her customers?
A)$39 
B)$28 
C)$11 
D)$0

Quizplus · Accepted Answer

Consumer surplus is the difference between the price consumers are willing to pay for a good or service and the price they actually pay. In this case, consumers are willing to pay up to $18 for Julie's service, but they only have to pay $7. Therefore, the consumer surplus is $18 - $7 = $11.

Table 16-1 Julie Plans to Start a Pet-Sitting Service.She Surveyed