Table 4-1

-Refer to Table 4-1.The table above lists the highest prices three consumers, Tom, Dick, and Harriet, are willing to pay for a short-sleeved polo shirt.If the price of the shirts falls from $28 to $20,
A)consumer surplus increases from $14 to $35.
B)Tom will buy two shirts; Dick and Harriet will each buy one shirt.
C)consumer surplus will increase from $70 to $95.
D)Harriet will receive more consumer surplus than Tom or Dick.

Question

Table 4-1
 
-Refer to Table 4-1.The table above lists the highest prices three consumers, Tom, Dick, and Harriet, are willing to pay for a short-sleeved polo shirt.If the price of the shirts falls from $28 to $20,
A)consumer surplus increases from $14 to $35. 
B)Tom will buy two shirts; Dick and Harriet will each buy one shirt. 
C)consumer surplus will increase from $70 to $95. 
D)Harriet will receive more consumer surplus than Tom or Dick.

Quizplus · Accepted Answer

When the price falls from $28 to $20, the consumer surplus increases because the difference between what consumers are willing to pay and what they actually pay becomes larger. The increase in consumer surplus is from $14 to $35.

Table 4-1 -Refer to Table 4-1.The Table Above Lists the Highest Prices