question archive In the market for a particular pair of sunglasses, Eboni is willing to pay $90 for a pair while Alexa is willing to pay $100 for a pair
In the market for a particular pair of sunglasses, Eboni is willing to pay $90 for a pair while Alexa is willing to pay $100 for a pair
Subject:EconomicsPrice:2.87 Bought7
In the market for a particular pair of sunglasses, Eboni is willing to pay $90 for a pair while Alexa is willing to pay $100 for a pair. The actual price that each has to pay for a pair of sunglasses is $45. What is the combined amount of consumer surplus of Eboni and Alexa?
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Answer The combined amount of consumer surplus is $100.
Consumer surplus is the difference between the maximum price willingness to pay and the actual price they pay.
Consumer surplus = maximizing willingness to pay - actul price to pay.
Here, actual amount they pay is $45
Consumer surplus of Eboni = 90 - 45 = $45.
Consumer surplus of Alexa = 100 - 45 = $55.
So, the combined amount of surplus = 45 + 55 = $100.
