The following are reservation prices of three consumers for two products. For consumer A: $40 for product 1 and $250 for product 2; for consumer B: $140 for product 1 and $150 for product 2; for consumer C: $90 for product 1 and $290 for product 2. Assume the marginal (and average) cost of each product is 100. What would consumer B purchase if prices are 130 for product 1, 145 for product 2, and 270 for the bundle, and what is their surplus?
a. Consumer B purchases product 2 and gets a surplus of $5
b. Consumer B purchases product 1 and gets a surplus of $10
c. Consumer B purchases the bundle and gets a surplus of $15
d. Consumer B purchases the bundle and gets a surplus of $20
Clear my choice
