Table 4-D
Miles demands jazz CDs according to the following demand schedule:
$$\begin{array} { c c }
\text { Price af jazz CDs } & \text { Qurantity of jazz CDs } \
\$ 30 & 1 \
\$ 25 & 2 \
\$ 20 & 3 \
\$ 15 & 4 \
\$ 10 & 5
\end{array}$$
-Refer to Table 4-D.If the price of jazz CDs equals $20, the consumer surplus Miles receives from purchasing jazz CDs is:
A)$10.
B)$15.
C)$20.
D)$55.
E)$75.

Question

Table 4-D
Miles demands jazz CDs according to the following demand schedule:
 $$\begin{array} { c c } 
\text { Price af jazz CDs } & \text { Qurantity of jazz CDs } \
\$ 30 & 1 \
\$ 25 & 2 \
\$ 20 & 3 \
\$ 15 & 4 \
\$ 10 & 5
\end{array}$$
-Refer to Table 4-D.If the price of jazz CDs equals $20, the consumer surplus Miles receives from purchasing jazz CDs is:
A)$10.
B)$15.
C)$20.
D)$55.
E)$75.

Quizplus · Accepted Answer

Consumer surplus is the difference between what Miles is willing to pay and what he actually pays. At $20, Miles buys 3 CDs. He is willing to pay $30 for the first, $25 for the second, and $20 for the third. The consumer surplus is ($30-$20) + ($25-$20) = $10 + $5 = $15.

Table 4-D Miles Demands Jazz CDs According to the Following

Table 4-D
Miles Demands Jazz CDs According to the Following