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18 October, 13:54

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?

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  1. 18 October, 15:37
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    Consumer Surplus for Brent is lowest among the three

    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
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