A new car has a list price of $45,000. Harnit decided that he would pay no more than $42,000 for this car. He buys the car for $41,000. Harnit's consumer surplus is
A) $45,000.
B) $42,000.
C) $4,000.
D) $3,000.
E) $1,000.

Question

Quizplus · Accepted Answer

Consumer surplus is the difference between what a consumer is willing to pay and what the consumer actually pays. Harnit was willing to pay $42,000 but paid $41,000, so his consumer surplus is $42,000 - $41,000 = $1,000.

A New Car Has a List Price of $45,000