If James is willing to sell an extra concert ticket for $40 and actually sells it for $100, his consumer surplus is $60.

Question

Quizplus · Accepted Answer

The consumer surplus is the difference between the maximum price a consumer is willing to pay (the reservation price) and the actual price paid. In this case, James' reservation price was $40, but he sold the ticket for $100. Therefore, his consumer surplus would be $60 if he were buying the ticket, but as he is the seller here, he would not have a consumer surplus. Instead, he would have a producer surplus, which is the difference between the price he receives and the minimum price he is willing to accept for the ticket.

If James Is Willing to Sell an Extra Concert Ticket