Answer to Question #222071 in Microeconomics for Ali

Question

Ayesha buys an Iphone for $240 and get consumer surplus of $160.
• What is her willingness to pay?
• If she had bought the Iphone on sale for $180, what would her consumer surplus have been?
• If the price of an Iphone were $500, what would her consumer surplus have been?

Answer 1

Her Willingness to Pay $= 240 + 160=$ $ $400$

 If she had bought the Iphone on sale for $180, her consumer surplus have been

Consumer surplus$=400−180=$ $ $220$

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

Ayesha would not buy it because her willingness to pay in the amount of $400 is lower than current price .

Therefore she would not achieve consumer surplus and also she would leave the market