Fred's demand schedule for movie DVDs is as follows: At $30, he would buy 1; at $25, he would buy two; at $15, he would buy 3; and at $10, he would buy 4. If the price of movie DVDs equals $25, the consumer surplus Fred receives from purchasing movie DVDs would be:
A)zero.
B)$5.
C)$25.
D)$55.

Question

Fred's demand schedule for movie DVDs is as follows: At $30, he would buy 1; at $25, he would buy two; at $15, he would buy 3; and at $10, he would buy 4. If the price of movie DVDs equals $25, the consumer surplus Fred receives from purchasing movie DVDs would be:​
A)​zero.
B)​$5.
C)​$25.
D)​$55.

Quizplus · Accepted Answer

At a price of $25, Fred will buy 2 movie DVDs. His willingness to pay for 2 DVDs is $30, therefore his consumer surplus is $30 - $25 = $5.

Fred's Demand Schedule for Movie DVDs Is as Follows: at $30