Suppose you are at a flea market and are considering buying a box of vintage records. You are trying to bargain down the price, but the seller overhears you telling a friend that you are willing to pay up to $50. Once the seller overheard you, your consumer surplus is likely to be lower because:

Question

Business

Kelly Duke

17 September, 20:38

Suppose you are at a flea market and are considering buying a box of vintage records. You are trying to bargain down the price, but the seller overhears you telling a friend that you are willing to pay up to $50. Once the seller overheard you, your consumer surplus is likely to be lower because:

+4

Answers (1)

Know the Answer?

Ralph · Answer 1

The seller will charge you as much as you are willing to pay since the sellers overhead you mentioning it

Explanation:

Consumer surplus is the difference between the price that a consumer pays and the price that they are willing to pay.

If after a successful bargain, a customer is able to beat down the price of goods lower than how much he planned to buy it, then his consumer surplus is high but if in the case as found in this question where the seller is aware of the amount the consumer is willing to pay and the seller is likely to sell for that amount, there will a lower consumer surplus.