A market has four individuals,each considering buying a grill for his backyard.Assume that grills come in only one size and model.Abe considers himself a grill-master,and finds a grill a necessity,so he is willing to pay $400 for a grill.Butch is a meat-lover,honing his grilling skills,and is willing to pay $350 for a grill.Collin just met the girl of his dreams,and she loves a good grilled steak,so in his effort to impress her he is willing to pay $320 for a grill.Daniel loves grilled shrimp and thinks it might be cheaper in the long run if he buys a grill instead of eating out every time he wants grilled shrimp,so he is willing to pay $200 for a grill. If the market price of grills is $300,given the scenario described,the total consumer surplus would be:
A) $1,070.
B) $170.
C) $200.
D) None of these is true.

Question

Quizplus · Accepted Answer

Consumer surplus is calculated as the difference between what consumers are willing to pay and the market price. Abe's surplus is $100 ($400 - $300), Butch's surplus is $50 ($350 - $300), Collin's surplus is $20 ($320 - $300), and Daniel does not buy the grill as his willingness to pay is below the market price. The total consumer surplus is $100 + $50 + $20 = $170.

A Market Has Four Individuals,each Considering Buying a Grill for His