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 $320,given the scenario described,Abe's consumer surplus would be:
A) $400.
B) $350.
C) $320.
D) $80.

Question

Quizplus · Accepted Answer

Consumer surplus is the difference between the highest price a consumer is willing to pay for a good or service and the actual price they have to pay. In this case, Abe is willing to pay $400 for a grill but the market price is only $320. Therefore, his consumer surplus is $80 ($400 - $320). So, the best choice is D.

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