Consider the following table:

 

	First Apple	Second Apple	Third Apple
Xavier	$1.75	$1.55	$1.15
Yadier	$1.50	$1.25	$0.75
Zavi	$1.30	$1.10	$0.70

If the market price of an apple is $1.40, then the consumer surplus amounts to:

a. $0.60

b. $1.20

c. $1.40

d. $3.40

Each person will consume the number of apples for which their maximum price that they are willing to pay is above the market price.

• In this case, Xavier will consume 2 apples, Yadier will consume 1 apple, and Zavi will consume 0.

The consumer surplus is the difference between the price that these individuals will may (i.e. the market price) and the maximum price that they are willing to pay according to the table. The answer is therefore:

Consumer surplus = (1.75 - 1.40) + (1.55 - 1.40) + (1.50 - 1.40)

=$0.60

• The answer is thus A.