Answer to Question #136864 in Microeconomics for Sariyu Dinesh

Question #136864

Melissa buys an iPhone for $240 and gets consumer surplus of $160.

a. What is her willingness to pay?

b. If she had bought the iPhone on sale for $180, what would her consumer surplus have been?

c. If the price of an iPhone were $500, what would her consumer surplus have been?


1
Expert's answer
2020-10-07T07:18:02-0400

a) Willingness to pay refers to the sum of the price paid and consumer surplus. Hence, Melissa's willingness to pay is;

240+160=400240 + 160= 400


b) Her consumer surplus at a price of $180 would be;

400180=220400 − 180 = 220


c) If the price of an iPhone was $500, Melissa would not have purchased it since the price is higher than her willingness to pay. Therefore, there is no consumer surplus she would receive.


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Comments

Farhia
30.05.22, 20:22

Thnks

Borsha
05.08.21, 04:59

Thank you so much

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