Question

Suppose the market price is $5. The buyer who buys the first unit of output has a willingness-to-buy equal to $10; the buyer who buys the second unit of output has a willingness-to-buy equal to $9; and the buyer who buys the third unit of output has a willingness-to-buy equal to $8. Total consumer surplus is: $10. $5. $27. $12.

Answer 1

Answer:

Option D is correct one.

$12

Explanation:

Consumer surplus is the difference between willingness to pay and market price.

Consumer surplus= (10-5) + (9-5) + (8-5)

= 5+4+3= 12