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Alice is willing to spend $30 on a pair of jeans, and has a coupon for $10 off she found online.

She selects and purchases a $35 pair of jeans, pre-discount.
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What is Alice's Consumer Surplus?

Respuesta :

Answer:

$5

Explanation:

The computation of Alice's consumer surplus is shown below:

Consumer surplus =  Willing to spend - Market price after considering the discount

where

Willing to spend = $30

Market price equals to

= Purchase a pair of jeans - coupon rate

= $35 - $10

= $25

So, the consumer surplus is equal to

= $30 - $25

= $5

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