Arthur buys a new mobile phone for $150.He receives consumer surplus of $150 from the purchase.How much does Arthur value his cell phone?

Question

Quizplus · Accepted Answer

Arthur values his cell phone at $300 because consumer surplus is the difference between what a consumer is willing to pay and what they actually pay. Since he paid $150 and received a consumer surplus of $150, he must value the phone at $150 + $150 = $300.

Arthur Buys a New Mobile Phone for $150