Sir Plus has a demand function for mead that is given by the equation D(p)= 100 - p.If the price of mead is $95, how much is Sir Plus's net consumer's surplus?
A)12.50
B)6.25
C)25
D)5
E)9,500

Question

Quizplus · Accepted Answer

The net consumer's surplus is the difference between the total amount consumers are willing to pay for a good and the amount they actually pay. In this case, the total amount consumers are willing to pay is given by the demand function, D(p)= 100 - p. The amount they actually pay is $95. So the net consumer's surplus is D(95) - 95 = 100 - 95 - 95 = 12.50.

Sir Plus Has a Demand Function for Mead That Is