Ashley bought a new pair of jeans. When she walked out of the store, she thought, "I got such a great deal; I would have paid $40 more for these jeans!" This best represents the concept of:
A) consumer surplus.
B) producer surplus.
C) total surplus.
D) equilibrium.

Question

Quizplus · Accepted Answer

Consumer surplus is the difference between what a consumer is willing to pay for a good and what they actually pay. Ashley's willingness to pay $40 more than the purchase price reflects her consumer surplus.

Ashley Bought a New Pair of Jeans