Answer to Question #195700 in Finance for Adekunle-Ismail Ja

Question

Question 1. Melissa buys an iPhone for $120 and gets consumer surplus of $80.

What is her willingness to pay?

If she had bought the iPhone on sale for $90, what would her consumer surplus have been?

Answer 1

1.Melissa's willingness to pay for some good (in our example iPhone) is $200

=(120+ 80). =$200

2. Her consumer surplus would have been $110

=($200 - $90)=$110