Suppose that the price of a donut is $1 each. Lorena is willing to pay $2 for the first donut, Ricky is willing to pay $1.80 for the second donut, Jennifer is willing to pay $1.50 for the third donut, and Betty is willing to pay $1.20 for the fourth donut. In equilibrium, what is the total consumer surplus from the consumption of donuts?

Question

Social Studies

Quincy Warner

23 March, 23:40

Suppose that the price of a donut is $1 each. Lorena is willing to pay $2 for the first donut, Ricky is willing to pay $1.80 for the second donut, Jennifer is willing to pay $1.50 for the third donut, and Betty is willing to pay $1.20 for the fourth donut. In equilibrium, what is the total consumer surplus from the consumption of donuts?

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Answers (1)

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Giada Barker · Answer 1

Answer: The answer is $2.5

Explanation:

First donut surplus

$2 - $1 = $1

Second donut surplus

$1.80 - $ 1 = $0.80

Third donut surplus

$1.50 - $ 1 = $0.50

Fourth donut surplus

$1.20 - $1 = $0.20

Total surplus = $1 + $0.80 + $0.50 + $0.20 = $2.5