Question

Suppose Brent, Callie, and Danielle each purchase a particular type of electric pencil sharpener at a price of $20. Brent’s willingness to pay was $22, Callie’s willingness to pay was $25, and Danielle's willingness to pay was $30. Which of the following statements is correct?

Answer 1

Consumer Surplus for Brent is lowest among the three

Step-by-step explanation:

Given;

Price of electric sharpener = $20

Brent’s willingness to pay = $22

Callie’s willingness to pay = $25

Danielle's willingness to pay = $30

Now,

The Consumer surplus is calculated as:

= Maximum price a consumer is willing to pay - Actual price

Therefore,

Consumer Surplus for Brent = $22 - $20 = $2

Consumer Surplus for Callie = $25 - $20 = $5

Consumer Surplus for Danielle = $30 - $20 = $10

Therefore,

The Consumer Surplus for Brent is lowest among the three