Question

Anna attends an art auction, and decides she’d like to buy a painting. She gives herself an upper limit of $3000 when starting the bidding process. The second-highest bidder offers $2200, and so Anna wins the painting by offering $2300. What is Anna’s consumer surplus?

$0
$700
$2200
$2300
$3000

Answer 1

$700

Explanation:

Anna's consumer surplus is the difference between her willingness to pay and the price she actually paid, which is $3000 - $2300 = $700.

Therefore, the answer is $700.

Answer 2

$700

Explanation:

She's willing to pay up to $3000.

She pays only $2300.

consumer surplus = $3000 - $2300 = $700